European Regional Policy (ERP) aims to reduce economic and social disparities between territories, redistribute wealth between regions and countries and stimulate growth in areas lagging behind. With its 351 billion structural funds allocated in the seven-year period 2014-2020 - of which 44 billion are earmarked for Italy, 13% - it is the European Union's policy-pillar and the largest experiment in redistributing incomes between regions and countries in the Western economy.

Does ERP work? The estimation of the impact remains controversial, also because the impact is strengthened or weakened depending on the characteristics of the territories financed. The reason? One of the most relevant is the neighborhood-effect: as this research reveals, being surrounded by poor regions negatively affects ERP outcomes, because (negative) interactions with neighbors decrease the effectiveness of interventions and contribute to increasing inequalities.

This is what happens in many areas of Southern Europe, where areas with low productivity, high unemployment, low levels of education and low incomes are concentrated. Starting from Italian Mezzogiorno.