Cohesion or collusion? EU funds in places with corrupt local institutions
利用意大利城市议会因与有组织犯罪勾结而被解散的数据，研究发现腐败地方政府会策略性地避开大型欧盟项目以规避反黑手党法规，导致资金流向更小、更不透明的项目，削弱了欧盟凝聚政策的效果。
This paper provides the first analysis of how local institutional quality affects the distribution of EU funds across private beneficiaries, public entities, and local governments. Using high-quality Italian administrative data on city council dismissals due to collusion with organised crime, we examine whether corruption affects municipal control over EU resources. We apply a staggered difference-in-differences model and event studies and find that corrupt local governments receive significantly fewer EU funds for their own operations. However, this is not a consequence of efficient corruption detection, but rather a strategic choice. Corrupt administrations avoid larger EU projects to sidestep stricter anti-mafia regulations. This distortion weakens Cohesion Policy’s impact, deprives communities of critical investment, and hampers local economic growth. While Italy’s anti-mafia laws appear effective in blocking criminal access to EU funds, our findings expose the adaptability of organised crime, which simply switches its operations below existing regulatory thresholds. The takeaway is clear: good institutions matter. Where corruption thrives, EU funds do not disappear entirely, but they flow differently, fundamentally to smaller, more opaque projects. Stronger oversight is essential to ensure that Cohesion Policy delivers on its promise.