The impact of the 2007-2013 Structural and Cohesion Funds on Tuscan economy

The structural and cohesion policy is a primary concern of the European Union. The total budget of the 2007-2013 Structural and Cohesion Funds allocated to the 15EU member states was more than 200 milliard Euros. In the same span of time, Tuscany has received about 1.1 milliard Euros under the “Regional competitiveness and employment” Objective.
The enhancement of an economy’s ability to recover is not among the chief purposes of the European structural and cohesion policy, but even so, it has somehow a short-run stabilizing effect on the economic cycle. The present report fits into the debate on the efficacy of the European structural and cohesion policy by estimating the possible stabilizing effect of the EU financed projects concerning 42 local economic systems (sistemi economici locali – SEL) for the period 2007-2013. The survey is particularly valuable since the period under study has been marked by the financial crisis that started in 2007, led to the economic downturn of 2008, and was later characterized as a “Great recession”.
To measure the stabilizing effect a two-step procedure was followed: the first phase assessed the volatility of added-value grown rates and employment in the 42 Tuscan SELs, while the second phase used techniques of spatial econometrics to estimate the anti-cyclical effect of funds on these two macroeconomic variables.