Territorial Governance and Economic Development in the EU’s Outermost Regions: The Role of Structural Funds

The expansion of authority beyond and within the state has strongly strengthened the power of regions and prompted the rise of subnational tiers of government within the states. Within the European Union (EU), the Outermost Regions (OR) represent a distinctive and specific format of territorial governance, framed by a multilevel institutional structure that intertwine different levels of authority. These regions combine geographical remoteness and structural vulnerability with formal political integration into the EU polity, making them a particularly revealing case for the study of territorial politics in multilevel systems. Institutional diversity across OR is not merely formal. It shapes differentiated trajectories of regional and economic development and is, in turn, influenced by the logic of allocation and the volume of EU Structural Funds received. Given the variation in socio-economic conditions across EU regions, important challenges arise for European territorial governance. These challenges may be cause or consequence of divergent development paths and reflect the territorial distribution of public resources through cohesion policy. While cohesion policy is formally designed as a mechanism for reducing territorial disparities, its effects are far from uniform. Consequently, we ask, why are the Structural Funds central for regional development within the EU regions? We use data from the two Portuguese outermost regions in the context of the EU to study the variation and the differential impacts of Structural Funds and the differential impacts of structural funds and further will use other regions of the EU.