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Territorial Capital and the Impact of European Cohesion Policy

European Union
Public Policy
Regionalism

Abstract

The regions of the European Union are extremely different in structural terms, and especially they are characterized by very different systems of territorial assets of economic, cultural, social and environmental nature. These elements, included under the comprehensive concept of territorial capital, represent the development potential of places. The regional endowment of territorial capital is therefore an important determinant of regional growth, and also of the expected impact of Cohesion Policy at regional level. This on the basis of two mechanisms: on one hand, the endowment of territorial capital can act as a filter, so that when it is abundant it can facilitate and enhance the impact of policies devoted to growth, while when scarce it can hamper the policy impact. On the other hand, Cohesion Policy, being devoted to building territorial structural assets, can help building territorial capital, which in the long run will enhance the regional growth rate. Additionally, it is not a matter of how much, but also of which territorial capital assets are available in the regions. In fact, territorial capital assets can be classified under the two dimensions of rivalry and materiality, and assets of different types are more favourable to policies with different objectives. This paper analyses the relationship between territorial capital and Cohesion Policy in a multidimensional way. Using at a fine territorial scale (NUTS3) statistical data on territorial capital endowment and detailed cohesion policy expenditure on 19 axes over the period 2000-06, the paper first identifies what type of territorial capital is present in the regions of Europe, and which cohesion policy mixes have been implemented in them. It then investigates under which regional conditions policies providing hard structural assets are more effective in enhancing medium-run growth and under which ones softer and more socially related axes are to be preferred.