Assessing the effectiveness of the EU's regional policies on real convergence: An analysis based on the HERMIN model

In this paper, an alternative methodology for the assessment of the European Union's (EU's) regional policies is proposed, making use of the HERMIN macro-econometric model. A major feature of this approach is that it allows the comparison of the actual evolution of the economy under analysis, with and without European funds, so that it is possible to assess in a more accurate way the effectiveness of the EU aid over the period of analysis. An empirical application of the methodology is also offered, using as a case study an Objective 1 Spanish region, Castilla-La Mancha, traditionally backward but showing in the last years a special dynamism.