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The EU Cohesion policy is based on a complex system of fiscal transfers, their main goal being to accelerate economic and social cohesion. In this paper, the contributions of the Structural funds and Cohesion fund (SFCF) to economic growth on national level while controlling for the institutional quality are tested. Aim of the paper is show whether institutional quality is a bottleneck for effective usage of SFCF. The analysis is based on the country-level data during 2000-2013 period. In the presented econometric models, we emphasize the importance of the institutional quality on the economic growth. The results show that when Institutional Quality Indicator as a regressor is included together with the size of inflows from SFCF, SFCF inflows have no influence on economic growth. Moreover, we found that neither the institutional quality separately or in interaction with SFCF inflows, is a statistically significant factor for economic growth in the EU-27. The results are signifincantly different when we apply the same methodology on two subsamples, where we distinguish between countries with high and low level of institutional quality index.

The EU Cohesion policy is based on a complex system of fiscal transfers, their main goal being to accelerate economic and social cohesion. In this paper, the contributions of the Structural funds and Cohesion fund (SFCF) to economic growth on national level while controlling for the institutional quality are tested. Aim of the paper is show whether institutional quality is a bottleneck for effective usage of SFCF. The analysis is based on the country-level data during 2000-2013 period. In the presented econometric models, we emphasize the importance of the institutional quality on the economic growth. The results show that when Institutional Quality Indicator as a regressor is included together with the size of inflows from SFCF, SFCF inflows have no influence on economic growth. Moreover, we found that neither the institutional quality separately or in interaction with SFCF inflows, is a statistically significant factor for economic growth in the EU-27. The results are signifincantly different when we apply the same methodology on two subsamples, where we distinguish between countries with high and low level of institutional quality index., Kohezijska politika Europske unije predstavlja složen sustav fiskalnih transfera kojima se želi ubrzati ekonomska i socijalna kohezija. U ovom radu provedeno je empirijsko istraživanje na temelju ocjenjivanja više regresijskih jednadžbi ekonomskog rasta s ciljem utvrđivanja doprinosa Kohezijskog i strukturnih fondova ekonomskom rastu zemalja članica EU u razdoblju od 2000. do 2013. godine. Za nezavisnu varijablu, između ostalih, odabran je indeks kvalitete institucija. Rezultati analize na cjelokupnom uzorku zemalja ukazuju na to da, iako se potvrđuje postojanje konvergencije, strukturni i Kohezijski fond nemaju utjecaj na ekonomski rast. Jednako tako, utvrđeno je da kvaliteta institucija zasebno, niti u interakciji sa sredstvima strukturnih i Kohezijskog fonda nije statistički značajan čimbenik ekonomskog rasta u skupini EU27, ali se rezultati značajno mijenjaju ako se osnovni uzorak razdvoji na zemlje s visokom i niskom razinom kvalitete institucija.

The achievement of social and economic development involves three processes: the increase in gross domestic product per capita, the reduction of unemployment and increase of employment, the reduction of poverty and income inequalities. Directly related to that are the objectives of new EU member states, as well as other European countries that wish to join the Union and thus contribute to their own development – economic and social. Integrating the new Member States and candidate countries represents a great challenge for the EU, and especially for the social systems of individual countries. The reason for this is primarily a variety of social systems and socio-demographic characteristics of these countries. Because of the strong convergence those can adversely affect their economies, but also the entire Internal Market. With the support of financial instruments and measures that encourage convergence at the national and European level, national social policies contribute to overall economic and social development and economic and social cohesion. Economic convergence leads to social convergence, but not necessarily to the harmonization of social systems. The goals of the paper include the proper assessment of different effects and the dynamics of social (and economic) reforms, which enable a greater level of social convergence, the evaluation of the effectiveness of national social policies and the assessment of the ability of individual countries to adapt to the contrasting demands of social security and employment, and economic growth and development.