EU Funds: Governance & Impact

The research field ‘EU Funds: Governance and Impact’ seeks to understand the ‘rules of the game’ for spending of EU funds in Hungary and other CEE countries and the effects of these rules on the effectiveness of such funds.

Our approach

Our research topic focuses on the following questions:

  • How did the systems of public governance in CEE countries respond to the inflow of unprecedented amounts of EU funds over the last decade?
  • How can existing or newly created public institutions handle the planning and implementation of development programmes?
  • How do the institutions of public governance change as a consequence of programme execution?
  • What are the measurable impacts of executed programmes?
  • How do people perceive the results of EU-cofounded developments?

It focuses on the institutions or ‘rules of the game’ crafted for the spending of EU funds and relies mostly on the theoretical insights of new institutional economics. For empirical evidence on Hungary, we draw on original research and the extensive involvement of HETFA Research Institute in the programme evaluation of EU Funds between 2007 and 2013.

Leading Researchers

Gábor BALÁS, Károly MIKE


1. Contracting for Structural Funds

How do the rules of the game of EU cohesion policy shape the behaviour of Member State governments as they pursue their development goals? We explore this question from a contractual perspective. We argue that the analysis of the contract between the European Commission and a national government is crucial for understanding the latter’s incentives. And the terms of this contract are largely determined by the underlying principal-supervisor-agent contract between Member States and the EC. We pursue the consequences of the Commission–Member State contract for the institutionalisation of cohesion policy within the Member State, which is interpreted as the creation of a chain of agency contracts. We show both theoretically and with an empirical case study that the resulting contractual system affects the policy process in fundamental ways. Drawing on the insights of new institutional economics, the analysis of contracts detects some deep-seated causes of widely-perceived inefficiencies of EU-funded policies and points to potential institutional remedies.

Relevant resources:

Mike, Károly –Balás, Gábor (2014): Contracting for Structural Funds – How the EU’s Rules of the Game Shape the Behaviour of Member State Governments, HETFA Working Paper No. 8, Budapest

2. Planned research collaboration in CEE countries

The institutionalisation of cohesion policy within Member States has far-reaching consequences for the efficiency and effectiveness of development programmes. Yet, our knowledge of the key dilemmas of institutionalisation is still very limited. Although evaluators and researchers in individual countries have collected a great deal of information about the experience of each country’s system, this information is hardly shared across countries. We are currently working on bringing together researchers of CEE countries and possibly of other Member States in order to share knowledge and develop proposals to rethink the institutional setup of cohesion policy at EU level.

3. Creating employment through economic development programmes

By applying a spatial econometrics model for the Hungarian labour market based on some key figures of the previous twenty years of the Hungarian labour market and a macroeconomic prognosis, the study examines the relationship between the spatial differences in the demand for labour and the actual employment, as well, as the potential employment effects of job creation. Results show the significant but moderate effects of job creation. Both employability of labour and the macroeconomic conjuncture are channels of greater importance. It is also proven by the analyses that only a small part (less than ten percent) of jobs created by job creation programmes increases employment on the long run, moreover, the majority of them does not necessarily improve the rates locally but in those neighbouring microregions where labour force surplus is larger.

Summary of the study written by Klára Major and Tamás Tétényi is available here.

4. Job creation as an indicator of outcomes in ERDF programmes – EVALNET Research

The European Commission’s Expert Evaluation Network has conducted 27 national studies by the Network’s independent experts on jobs created as a core indicator of ERDF programmes outcomes. The main concern is with the comparability of the figures reported and how far they can be meaningfully aggregated across programmes, which has become increasingly important given the growing policy attention paid to job creation across the EU. The studies examine, in turn, the extent to which the indicator is used; the way it is defined and the method of data collection, the use made of the indicator and the average cost per job created. The national study on Hungary has been prepared by HETFA experts Gábor Balás & Gabriella Borbás.

5. Evaluation of Human Development Programmes in Hungary

In 2012 and 2013, HETFA Research Institute conducted evaluations of development programmes co-financed by Structural Funds and implemented in Hungary between 2007 and 2012. The evaluations covered human resource developments, such employment, public and higher education, social inclusion, as well as territorial development. They were commissioned by the National Development Agency of Hungary. Each evaluation covered all forms of financial support assigned from Structural Funds to interventions in one broad policy area. The underlying idea was to examine how EU funds were able to contribute to the broad strategic goals of a policy field. The evaluations (i) identified how the programmes were institutionalised and fitted into the broader institutional structure of the relevant policy field; (ii) explored the incentive structure created by this institutionalisation; and (iii) their consequences for the effectiveness and efficiency of the programmes. These evaluations supply considerable empirical material on Hungary’s experience with EU Structural Funds.

Evaluation of Programmes Targeting Higher Education

Evaluation of Measures Targeting the Improvement of Employment

Related projects and publications

Czaller, László (2016): Increasing Social Returns to Human Capital: Evidence from Hungarian Regions

Balás Gábor (2010): Mozgástér a 2013-ig tartó uniós források súlypontjainak meghatározásában [Scope for defining the principal areas of European Funds available until 2013] (available only in Hungarian)

European Commission (2013) Expert evaluation Network. Job creation as an indicator of outcomes in ERDF programmes. Prepared with the contribution of HÉTFA experts, Gábor Balás & Gabriella Borbás.

HÉTFA – Ernst & Young Tanácsadó Kft. (2010): „A kis- és középvállalkozások fejlesztésének stratégiája (2007-13)” közbenső értékelése [“Development strategies of small- and medium enterprises (2007-2013)” – intermediate evaluation (2010)]

HÉTFA – Ernst & Young Tanácsadó Kft. (2010): ÚMFT projekt kiválasztási eljárásainak értékelése [Selection methods of NHDP – evaluation (2010)]

HÉTFA – HBF Hungaricum Kft. (2008): A projektgazdák támogatások megszerzésével és felhasználásával kapcsolatos költségeinek felmérésére (2008) [Survey about the developer’s costs, added to acquiring and using of financial supports (2008)]

HÉTFA – Kopint-Tárki Zrt (2009): Az ÚMFT története [History of New Hungarian Development Plan]

HÉTFA – Kopint-Tárki Zrt (2010): Az I. Nemzeti Fejlesztési Terv foglalkoztatási hatásai  [Employment effects of the First National Development Program]

HÉTFA – REVITA – Városkutatás Ltd. (2013): Evaluation of SROP priority 5 interventions relating to social inclusion in the period of 2007-2012

HÉTFA – REVITA (2013): Evaluation of Programmes Targeting Higher Education

HÉTFA – REVITA (2013): Evaluation of cultural institutions’ service and infrastructural developments supporting education

HÉTFA (2009): Cohesion Policy Evaluation in Hungary. V4 project coordinated by the Polish Ministry for Regional Development

HÉTFA (2009): Kistérségi programcsomagok értékelése (2009) [Evaluation of micro regional programmes, 2009]

HÉTFA (2010): Félidőben: Az Új Magyarország Fejlesztési Terv három és fél éve – összefoglaló tanulmány és háttértanulmányok [Midterm: Three and a half year of the New Hungary Development Plan – summary and background studies. (2010)] 

HÉTFA (2011): Possibilities to Improve the Efficiency of Development Funds in Job Creation

HÉTFA (2012): Evaluation of developments serving the Roma integration

HÉTFA (2013): Evaluation of the NSRF measures on the development of public education

HÉTFA (2013): Exploring the socio-economic background of NSRF developments aiming at the decrease of youth unemployment

Kelemen Eszter – Megyesi Boldizsár (2010): Fejlődés vagy függés? A pályázati források hasznosulásának néhány tapasztalata. [Improvement or dependence? Lessons from the usage of tender funds.] Bizalom és Vállalkozás Program. Széljegyzet II. (available only in Hungarian)

Németh Nándor (ed.), Csite András, Kabai Gergely, Németh Nándor (2010): Helyi Kezdeményezésű Gazdaságfejlesztési Programok vizsgálata, értékelése esettanulmányokon keresztül. [Evaluating and analyzing “Locally Initiated Economy Development Program”, using case studies (2010)]. KTI Könyvek, MTA Közgazdaságtudományi Intézet, Budapest, 2011. (available only in Hungarian)

NFÜ (2013): Értékelési évkönyv. [Evaluation Yearbook.] (Available only in Hungarian)

Pannon Elemző – REVITA – HÉTFA – Budapest Intézet (2013): The Role of Community Funds in the Dynamization of Underdeveloped Regions

Pannon Elemző – REVITA – HÉTFA (2013): Evaluation of the Effects of EU Funding on Territorial Cohesion

Pannon.Elemző Iroda – Hétfa – Revita – KPMG (2013): Evaluation of Tourism Development with Respect to Territorial Cohesion

Pannon.Elemző Iroda – Hétfa – Revita (2013): Impact Assessment of Urban Network

PPH Közpolitikai Elemző Kft. & HBF Hungaricum (2009): A fejlesztéspolitika alapkérdései 2008-2009. [Basic Questions of Development Policy. Development Policy in 2007-2008.] Ed.: Balás Gábor (available only in Hungarian)

REVITA – HÉTFA – Budapest Intézet (2013): Evaluation of health-care-related cohesion-policy interventions in Hungary

REVITA – HÉTFA (2013): Evaluation of measures targeting the improvement of employment