The distributional effects of EU structural funds in Italy: a location-scale approach

This study investigates the dynamic impact of the European Agricultural Fund for Rural Development (EAFRD) and the European Regional Development Fund (ERDF) on regional GDP per capita in Italy-a country characterized by persistent North-South economic disparities. Employing a location-scale model, we find that both funds generate positive average effects and, crucially, negative scale effects, indicating a reduction in the dispersion of regional GDP per capita. This novel approach reveals that EU Structural Funds contribute to narrowing regional inequalities. While standard methods may obscure such distributional dynamics, our framework highlights the role of cohesion policy in promoting equitable regional convergence.