Absorption capacity has been argued to be an essential indicator of the effectiveness of cohesion policy in European Union (EU) member states. Using the Principal-Agent framework to study the...Show moreAbsorption capacity has been argued to be an essential indicator of the effectiveness of cohesion policy in European Union (EU) member states. Using the Principal-Agent framework to study the implementation stage of cohesion policy, this thesis aims to find whether the Commission as a principal can influence the absorption capacity of countries (the agents) through its control mechanisms, namely the ex-ante conditionalities and priority axes. By doing a comparative analysis of Bulgaria and Romania, findings suggest that while Bulgaria did not follow the Commission’s rules and absorbed a significant amount of funds, Romania, which strictly followed EU’s conditionalities, had its absorption capacity negatively influenced by the Commission. This negative influence is even more evident with the increased funding a member state receives for some of its operational programmes as larger financial assistance requires the country to follow more EU rules.Show less
