Growth and Convergence in the EU-15: More Evidence from the Cohesion Countries

Abstract

This paper analyzes income convergence within EU-15 over the period 1995 to 2013. By means of panel data techniques, we examine conditional β-convergence controlling for the impact of some economic factors such as investment in physical and human capital, inflation, government consumption and openness. In addition, the role of two institutional variables, corruption and bureaucracy is examined. We found that corruption, affects negatively the growth, in the full sample. On the contrary bureaucracy, hasn’t any significant effect on the growth performance of the wealthier EU members, while affects rather differently the economic performance of the four cohesion countries, namely Portugal, Ireland, Greece, and Spain, hampering growth.