Myth and Reality: Impact of Fiscal Transfers on Regional Convergence

The decision makers of the European Union have committed themselves a great number of times in the past decades to decreasing the economic and social differences between regions in the member states. This was designed to be achieved by the regional (cohesion) policy of the community; this is what the population in the poorest regions of new members have trusted in. The results are, however, far from unambiguous. This paper seeks to find reasons for this based on the experience of the region of Northern Hungary.