Development Policies in the EU : An International Comparison

This paper studies the impact of the EU Structural Funds Programs for 1989-93 on the growth path 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 have a substantial impact on economic growth in these economies and contribute 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 these transfer programs