The EU devotes a substantial part of its budget to structural funds aimed at favouring convergence within the Union. However, public regional development banks and the European Investment Bank (EIB) in particular are a crucial pillar of social and economic policy aimed at convergence because, if left unchecked, private financial markets proved a formidable force of divergence.
Knowledge of the impact of the bank¿s interventions is a difficult goal to achieve for various reasons. A brief consideration of the strong divergence in the estimates of investment multipliers can show how the issue can be controversial. Moreover, there is a lack of research on the issue of whether fiscal multipliers may be expected to be significantly higher or lower in laggard regions with respect to the richer areas within a country or a currency union.
To fill this gap, in this project we aim to estimate the impact on activity levels at the regional level of the EIB-financed investment projects. Knowledge of a possibly differentiated impact of its activities could affect the ex-ante evaluations of investment projects by modifying their expected economic returns and indirect effects in terms of impacts on income and employment levels.
The correction of regional and national imbalances within the European Union is a fundamental objective of the EU. The research will investigate the usefulness of a key EU player, the European Investment Bank, in helping achieve this crucial policy goal.
Beside the scientific interest in the potentiality (or lack thereof) of public intervention in fostering convergence, this research may help the EIB calibrating its own operations.