Can Regional Transfers Buy Public Support? Evidence from EU Structural Policy

On the occasion of the 65th birthday of Governor Klaus Liebscher and in recognition of his commitment to Austria’s participation in European monetary union and to the cause of European integration, the Oesterreichische Nationalbank (OeNB) established a “Klaus Liebscher Award”. It has been be offered annually since 2005 for up to two excellent scientific papers on European monetary union and European integration issues. The authors must be less than 35 years old and be citizens from EU member or EU candidate countries. Each “Klaus Liebscher Award” is worth EUR 10,000. The winning papers of the seventh Award 2011 were written by Steffen Osterloh and by Friederike Niepmann and Tim Schmidt-Eisenlohr (shared award). Steffen Osterloh’s paper is presented in this Working Paper while Friederike Niepmann’s and Tim Schmidt-Eisenlohr’s contribution is contained in Working Paper 170. In this paper Steffen Osterloh starts from the observation that regional transfers are often assumed to have an impact on the public opinion towards the benefactor, but that empirical evidence is still scarce. In his paper the author tests this hypothesis for the structural funds of the European Union (EU) by combining detailed data on regional transfers with public opinion surveys. A positive impact of transfers on public support for the EU can be confirmed. Moreover, the author scrutinizes the role of awareness of being a recipient of funds in this process. In particular, he finds that the impact of the amount of transfers on the individual’s awareness is heterogenous and particularly depends on education. Finally, the author shows that the type of information source which arouses the citizen’s awareness of the transfers affects the impact on his opinion.