Treatment-Effect Identification Without Parallel paths An illustration in the case of Objective 1-Hainaut/Belgium, 1994-2006

Imagine a region that has a lower income per head than the rest of the territory, and becomes eligible for a generous EU-funded transfer programme (the treatment). The evaluation of the effectiveness of such a policy can rest on a difference-in-differences analysis (DiD); which in essence consists of comparing the income-level handicap before and after the treatment. Imagine that DiD shows that the handicap has not diminished, or even that it has risen. Most observers would conclude to the inefficiency of the policy. The point we raise in this paper is that second thoughts are needed, because... Mehr ...