Structural policy is a main task of the European Union, with a third of the EU budget allocated for it. Its importance will increase with EU Eastern enlargement. The EU supports the infrastructure in European regions with the goal of increasing economic strength and achieving a convergence of the economic performance of the regions. An economic analysis of the efficiency and the redistribution effects of European structural policy is the goal of this research project. With a view to the future organisation of a European finance system, the study examines the federal level of the EU to which this task should be assigned in terms of both efficiency and redistribution. Different aspects of structural policy must be considered: the financing instruments of federal regional authorities; the mobility of households, enterprises and factors of production that can be taxed for the financing of structural policy; the information of supra-regional authorities concerning regional preferences and regional tax strength. The analysis of vertical fiscal relations between federal levels that are involved in structural is a special focus of the study.
The continuation of the project for two additional years has been approved by the DFG. Continuation
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