Development Policies in the EU: An International Comparison.

This paper studies the impact of the EU Structural Funds Program for the period 1989-93 on the growth paths of the major recipient countries, Greece, Ireland, and Portugal. It uses an endogenous growth model of private, public, and human capital accumulation in which the public sector and current account balances play a crucial role. Simulation results show that these programs had a substantial impact on economic growth in these economies and contributed markedly to their convergence to EU standards. Their relative long-run position, however, would still be far from EU standards, which suggests the importance of continuing the transfer program. Copyright 1997 by Blackwell Publishing Ltd