LAGs and Cohesion Policy Expenditures in Rural Regions

Abstract

The goal of this paper was to provide empirical evidence about how local action groups (LAGs) influenced structural fund expenditure under the Convergence objective of the 2007-2013 programming period in rural regions of the Czech Republic. An expectation was that LAGs developed skills in order to submit projects for financing under the external funding streams ‘beyond LEADER’. Hence, the spatial distribution of structural funding expenditures was analysed in LAG territories under the Convergence objective. The empirical results of this study did not reveal a positive influence of LAGs on structural funding expenditure under the Convergence objective. The territories of experienced and also highly experienced LAGs did not receive more structural funding than the territories of inexperienced LAGs. Moreover, results showed that projects prepared and submitted in the territories of inexperienced LAGs were significantly larger than the projects prepared and submitted in the territories of experienced LAGs. It was claimed that experienced LAGs seemed to be affected in two ways: (1) by learning processes oriented to preparing and submitting relatively small-scale projects under the LEADER programme and (2) by ‘squeezing’ skilled human capital out of relatively large-scale projects under the Convergence objective. However, the results also indicate that long-term experience in LEADER – this is understood to be highly-experienced LAGs – improved the capacity of LAGs in preparing and submitting also large-scale projects funded under the Convergence objective. Hence, the adverse ‘average size’ effect was reduced over time.