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Economia Politica

, Volume 36, Issue 1, pp 295–322 | Cite as

Rationing methods for allocating the European Union’s rural development funds in Poland

  • Vito FragnelliEmail author
  • Ewa Kiryluk-Dryjska
Original Paper
  • 29 Downloads

Abstract

In this paper, we evaluate the applicability of the bankruptcy and the relevance factors methods to the allocation of structural policy budgets using Polish Rural Development Program as a practical example. Our results demonstrate that the main problem with the bankruptcy approach used for policy budget allocation is that project claims are not directly related to project importance. Highly significant programs with small claims are potentially penalized by the proportional solution or by the Constrained Equal Losses solution, while projects of low importance and small claims may be fully funded using the Constrained Equal Awards solution. The relevance approach, on the other hand, is highly dependent on the measure computed using expert opinions. This measure is not influenced by claims. Thus, given reliable expert assessments, the relevance factors method appears advantageous to the bankruptcy approach. This method is also far superior to the less formal methods currently used by decision-makers.

Keywords

Budget allocation Bankruptcy problem Relevance factor measures Common agricultural policy Rural development 

JEL Classification

C71 Cooperative Games Q18 Agricultural Policy 

Notes

Acknowledgements

The authors gratefully acknowledge two anonymous reviewers for their useful detailed comments that allowed us to improve the paper. This work was supported by the Polish National Science Center (Grant number 2013/11/B/HS4/00685).

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Department of Sciences and Technological InnovationUniversity of Eastern PiedmontAlessandriaItaly
  2. 2.Faculty of Economics and Social SciencesPoznań University of Life SciencesPoznanPoland

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