Macro-regional evaluation of the Structural Funds using the HERMIN modelling framework

provided by Research Papers in Economics

Macro-regional evaluation of the Structural
Funds using the HERMIN modelling framework

John Bradley*, Edgar Morgenroth* and Gerhard Untiedt**

* Economic & Social Research Institute (ESRI), Dublin
** Gesellschaft für Finanz- und Regionalanalysen (GEFRA),
Münster

Abstract: The structural fund interventions play a crucial role in improving the social
and economic cohesion of the EU. A particular focus of the structural funds is on
Objective 1 regions that lag behind to the extent that their GDP per capita is below 75
per cent of the EU average. The amount of investment that is funded though the
Structural Funds by the EU is substantial and consequently EU legislation requires the
appraisal of the structural funds. However, while systematic monitoring and
evaluation frameworks are available at the national level and at the project level, a
rigorous and systematic method for quantifying the socio-economic impacts of
structural fund interventions on the regional economies has not been developed to the
same extent. One modelling framework - HERMIN - has been widely applied to
Structural Fund analysis at the national level and macro-regional level. The HERMIN
framework is based on a small open economy model. Importantly it incorporates
mechanisms, which are based on the endogenous growth literature, which allow it to
capture the long-run supply side impact of the Structural Funds along with the short
run Keynesian impact.

May 2003

Paper for presentation at the 43rd Congress of the European Regional Science
Association 27 Aug 2003 - 31 Aug 2003

University of Jyvaskyla, Jyvaskyla, Finland

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