Evaluating Malta's regional funding using input-output analysis

Abstract

One of the major objectives of the European Union's (EU) regional policy is to reduce regional inequalities. As more than one-third of EU budget is allocated towards tackling these issues the topic of the effectiveness of regional funding becomes more and more prominent. This dissertation evaluates EU's regional funding in Malta for 2007-2013 financing period through Operational Programme I using input-output analysis to identify static and cumulative effects based on information of interdependencies between sectors in the economy. Specifically, this analysis allows for the calculation of technical coefficients and sectoral output multipliers. This study thus unearthed both direct and indirect effects and the total final impact on the Maltese economy. For policy makers sectoral output multipliers could be useful as a guide of the degree of structural interdependencies between each sector and the rest of the economy.