Trends, Transfers and Convergence –

The impact of financial allocations to the Eastern member states of the European Union in the last two decades

Authors: Ádám Kerényi , Csaba Lakócai

In: HUN-REN CERS, Institute of World Economics, Working Paper Nr. 274 (2024) April 2024

Abstract

Following the collapse of the Soviet-style planned economies, the post-socialist region of Central and Eastern Europe has undergone a process of economic convergence after the initial shock of transition to a market economy. One stage in this process was accession to the European Union. Most of the countries in the region became members, making them eligible for further benefits and financial allocations. The extent to which these funds have been used effectively over the past decades varies from country to country, but overall, the convergence of these countries within the EU has continued. In this study, we examine the distribution of the net EU transfers to the post-socialist member states and their impact on macroeconomic and social indicators between 2004 and 2022. While these effects are clearly visible in terms of the formal economic and consumption indicators, they are less directly visible in terms of the informal wellbeing trends.