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

econometric techniques should be used, and this approach also suggests much
smaller policy impacts (Ederveen et al 2002 a and 2002b). So, the methodology
based on the HERMIN models is just one of many possible alternatives.

The following provides a summary of the overall impact of the CSF 94-99 in the four
Member States: Greece, Ireland, Portugal and Spain and the macro regions East
Germany and Northern Ireland. A more comprehensive analysis is set out in the
ESRI report (ESRI, 2002).

It should be strongly re-emphasised that the numbers in all tables that follow show
only the impacts of the public expenditure elements of the Structural Funds/SPD, i.e.,
the EU contribution plus the national public co-financing element. All national
private co-financing has been excluded. This means, that the impact results could be
taken as representing a lower bound, since not all elements of private co-finance are
included as multiplier benefits of purely public sector actions. Indeed, there were
cases described in earlier sections where the private co-finance elements came in far
below their targeted levels.

To assist in the interpretation of the subsequent Structural Funds simulation results, it
is useful to keep some summary measures in mind. The total size of the (public)
Structural Funds in each country relative to its GDP (GECSFRAT) is shown in Table
1. In Table 1, the historical GDP outturn is used to calculate the percentage share,
GECSFRAT, i.e., the Structural Funds public expenditures expressed as a percentage
of GDP. As a share of total GDP, the largest Structural Funds were those of Greece
and Portugal, where the Structural Funds expenditures constituted about 3 percent of
GDP per annum. The next largest was that of Ireland, between 1.4 and 1.8 percent of
GDP. Spain was the smallest, at about 1.2 percent of GDP.¹⁰

¹⁰ In the case of Spain only certain regions were designated Objective 1. But our Spanish HERMIN
model is for the entire economy, and we treat the Structural Funds “as if” Spain was an Objective 1
country.

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