Structural funds and the economic divide in Italy

This paper provides a contribution to the debate on the role of European Union cohesion policy in Italy. The focus is on the territorial effects of European structural funds from 1996 to 2007. The empirical analysis considers a neoclassical growth model which is augmented by the structural funds spent by each region. Using panel data and a dynamic panel estimator we find that, even though structural funds have had a greater impact in the South compared to the Centre-North of the country, they have not contributed to reducing the productivity divide in Italy.