Thesis (Selection of subject)

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Public investment and municipalities: who receives EU and government subsidies and why?

Thesis title in Czech:	Veřejné investice a obce: kdo dostává EU a národní dotace a proč?
Thesis title in English:	Public investment and municipalities: who receives EU and government subsidies and why?
Academic year of topic announcement:	2019/2020
Thesis type:	diploma thesis
Thesis language:	angličtina
Department:	Institute of Economic Studies (23-IES)
Supervisor:	prof. Petr Janský, Ph.D.
Author:	hidden - assigned by the advisor
Date of registration:	28.06.2021
Date of assignment:	28.06.2021
Date and time of defence:	01.02.2023 09:00
Venue of defence:	Opletalova - Opletalova 26, O206, Opletalova - místn. č. 206
Date of electronic submission:	03.01.2023
Date of proceeded defence:	01.02.2023
Opponents:	PhDr. Lenka Šťastná, Ph.D.



Advisors:	Petr Bouchal, M.Phil.

Guidelines

Public investment and municipalities: who receives EU and government subsidies and why?
Papp, Z. (2019). Votes, money can buy. The conditional effect of EU Structural Funds on government MPs’ electoral performance. European Union Politics, 20(4), 543–561. https://doi.org/10.1177/1465116519862875
Veiga, L.G. Determinants of the assignment of EU funds to Portuguese municipalities. Public Choice 153, 215–233 (2012). https://doi.org/10.1007/s11127-011-9786-y
Stephen Bloom & Vladislava Petrova (2013) National Subversion of Supranational Goals: ‘Pork-Barrel’ Politics and EU Regional Aid, Europe-Asia Studies, 65:8, 1599-1620, DOI: 10.1080/09668136.2013.833014
Banaszewska, M., & Bischoff, I. (2017). The Political Economy of EU-funds: Evidence from Poland, Jahrbücher für Nationalökonomie und Statistik, 237(3), 191-224. doi: https://doi.org/10.1515/jbnst-2017-1105

More related topics and other information available here:
https://docs.google.com/document/d/1BqgkJZB35Q7VYmJrj8eE61cgKCFou08uZADfIk-iv6w/edit?usp=sharing

References

Papp, Z. (2019). Votes, money can buy. The conditional effect of EU Structural Funds on government MPs’ electoral performance. European Union Politics, 20(4), 543–561. https://doi.org/10.1177/1465116519862875

Veiga, L.G. Determinants of the assignment of EU funds to Portuguese municipalities. Public Choice 153, 215–233 (2012). https://doi.org/10.1007/s11127-011-9786-y

Stephen Bloom & Vladislava Petrova (2013) National Subversion of Supranational Goals: ‘Pork-Barrel’ Politics and EU Regional Aid, Europe-Asia Studies, 65:8, 1599-1620, DOI: 10.1080/09668136.2013.833014

Banaszewska, M., & Bischoff, I. (2017). The Political Economy of EU-funds: Evidence from Poland, Jahrbücher für Nationalökonomie und Statistik, 237(3), 191-224. doi: https://doi.org/10.1515/jbnst-2017-1105

Becker, S.O., Egger, P.H. & von Ehrlich, M., 2010. Going NUTS: The effect of EU Structural Funds on regional performance. Journal of Public Economics, 94(9-10), pp.578-590.

Preliminary scope of work

Motivation:
The European Structural Funds were created to provide the regional policy of the European Union. Their main function is to promote economic convergence between member states, as well as between richer and poorer regions within these states. The EU funds mechanism is designed in such a way that the European Commission develops objectives and policies and thus creates a common framework for structural funds. However, most of the responsibility for making decisions on the selection of specific projects lies with the central governments of the member countries. This leaves a lot of room for decision-makers on the allocation of funds at the national level to achieve their own political goals.

Although the cohesion policy of the European Union is aimed at achieving equality between regions within one state, in reality, some countries are focusing on improving the national economy as a whole.
Some politicians are of the opinion that it is more profitable to place subsidies in wealthier regions for greater national benefit (Bloom & Petrova, 2013).

There is also research confirming that in situations where the central government distributes subsidies, regional funding can follow the principles of a 'pork-barrel' policy. Veiga (2012) present, based on data from Portugal, that more funds are transferred to municipalities where the governing party is supported, and that funding increases during election years. Banaszewska& Bischoff (2017) demonstrate similar results in Poland.

Hypotheses:
1. EU subsidies are allocated to poorer regions to reduce inequality between regions
2. EU subsidies are allocated to more developed regions to achieve greater efficiency
3. Municipalities with more votes for governing political parties receive more subsidies from European structural funds.

Expected Contribution:
The contribution of this paper is to examine various hypotheses about the distribution of EU subsidies at the national level in order to explain why some regions receive more EU regional subsidies, while others receive less or nothing at all. Most of the previous research in this area has focused on the 2007-2013 policy period and earlier. In this thesis, we will expand the analysis to another program period 2014-2020, and try to improve the analysis taking into account the results of previous studies.