The cash divide: the allocation of European Union regional grants

To promote economic and social cohesion, the European Union (EU) structural funds part-finance public investment programmes in European regions with about €30 billion per year. This article develops an explanation for the apportionment of structural funds across EU regions.

It is argued that the Commission's decisions on regional transfer levels reflect its bureaucratic interest and potentially undermine EU goals. Using a new data set on regional transfer payments in the EU-15 from 2000 to 2006, and qualitative interviews with decision-makers, this argument is tested and corroborated. In doing so, it is shown that the recipient regions' level of economic affluence is necessary, but no sufficient explanatory factor for regional transfer levels. In contrast to previous findings in the literature, the empirical record does not suggest that regional partisan politics has an effect on the size of regional transfer levels.