European Union and nationally based cohesion policies in the Italian regions

This paper analyzes the effects of cohesion policies on the gross domestic product (GDP) per capita of the 20 Italian administrative regions for the period 1994-2013. The analysis includes both European Union and national funds. It estimates average partial effects through a control-function approach based on the funds' allocation rules, and allows for the role of the regional environment on the impact of regional policies. A positive impact of European Union funds is found, as well as a less significant impact of (nationally financed) subsidies to firms. Quality of government has no relevance for European Union funds, but it enhances the impact of subsidies to firms.