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



total for the expenditures, they do not always give an accurate picture of the ex-post
scheduling of the expenditures. This is only an important issue in the case of Greece,
where the planned even spread of expenditures over the six years 1994-99 was
actually implemented in a very different way. Ex-post, the Greek Structural Funds
expenditures were re-programmed to the later years.

The “without- Structural Funds” simulation results are subtracted from the “with-
Structural Funds” simulation results, and this is used as a measure of the contribution
of the Structural Funds.

i. We first carry out a model simulation starting in the year 1993 (the year before
Structural Funds 94-99 was implemented), and continue the simulation out to
the year 2010, i.e., eleven years after the termination of Structural Funds 94-
99. This simulation acts as a “with- Structural Funds” baseline, and attempts
to describe the likely evolution of the economy in the presence of the
Structural Funds;

ii. For the purposes of isolating the separate impacts of Structural Funds 94-99,
we ignore the carry-over impacts of Structural Funds 89-93, as well as the
continuation of Structural Funds aid under the current Structural Funds 2000-
2006. Any examination of the actual outturn for the period 1994-2001 will
show the results of a “with- Structural Funds” policy framework. Thus, this
outturn included the carry-over from Structural Funds 89-93, the
implementation of Structural Funds 94-99, and the initial year of Structural
Funds 2000-2006 (when available). Consequently, a simple examination of
the actual macroeconomic outturn will present a misleading impression of the
likely role played by Structural Funds 94-99 in isolation from other Structural
Funds.

iii. The inclusion of the Structural Funds investment expenditures triggers a build
up of the stock of physical infrastructure and human capital. As explained in
Section 2 (Methodology), this boosts output directly and also raises the level
of productivity to an extent that is determined by the externality elasticities.

13



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