The Challenge of Financial and Output Performance of the Delivery of EU Cohesion Policy: A Network Approach

One of the main instruments of the EU that is aimed at ensuring similar high standards of living across the EU is Cohesion policy. Cohesion policy is governed by extensive rules and regulations regarding design, implementation and evaluation. Principles such as partnership are also applied to the policy process of Cohesion policy. Implementation structures within member states are designed to include important social, economic and regional actors in the implementation of the policy, creating a network for implementation. However, not much is known about how the inclusion of different organisations and their networks in the implementation stage is affecting the performance of the policy. This paper refines and tests a key proposition from network theory, notably that the location of implementation agencies within collaborative networks affects their performance in terms of the quality of the policy outcomes they achieve. To refine this proposition, I draw on social network theory to formulate specific and testable hypotheses regarding the effects of multiple ties, indirect ties, and embeddedness among implementation agencies on performance. To test these, I construct a unique dataset on the implementation of EU cohesion policy projects in Scotland. The dataset covers the implementation of 722 projects in the period 2007-13. The organisations that lead and participate in these projects are considered implementation agencies. Since many of these organisations are involved in the delivery of several projects, I can formulate indicators of the network relations among them. The dataset contains two indicators on the quality of performance of each of these projects: financial and output performance. The results of this research identify specific conditions under which organisational actors can improve the probability of better performance, and illustrate the nature of the relationships between different aspects of network activity and different types of performance, emphasising the importance of network relations for performance.