Is the Cohesion Policy Efficient in Supporting the Transition to a Low-Carbon Economy? Some Insights with Value-Based Data Envelopment Analysis

We evaluated the implementation of European Regional Development Funds (ERDF) devoted to Thematic Objective (TO) 4 in 23 beneficiary European Union (EU) Member States (MS). The assessment of each country was made through the value-based data envelopment analysis (VBDEA) approach in three phases. In the first phase, it was possible to conclude that 43% of the MS were efficient in the implementation of the ERDF devoted to a low-carbon economy (LCE), and the reasons for their efficiency were mainly explained by their execution rate. After running the second phase for the inefficient countries, it was possible to obtain the improvements that must be made for these countries to “emulate” their peers at the efficient frontier. Finally, in the third stage, we incorporated political concerns in the evaluation of the implementation of the ERDF by including constraints on the ranking order of the weights. A robustness analysis was also carried out, according to which it was found that only 22% of the MS under evaluation remained surely efficient for tolerances of δ = 5% and δ = 10%, with Spain being the most robust country. Other countries such as Romania (surely inefficient for δ = 5%), Hungary, and the Czech Republic (the most inefficient) did not manage to implement these funds efficiently. Considering these findings, the EU needs to further promote policies that ensure economic benefits from investing in an LCE, specifically for countries with fewer resources, while also providing them with better financial conditions and know-how.