Analysis of the European Recovery Fund (RRF) shows a link between allocation size and baseline institutional quality. Treated countries received 10–19 % of GDP, with Greece at 19.4 % and a World Governance Indicators score of 0.45. EU control countries received only 1–2 % of GDP and had higher WGI scores from 1.3 to 2.1. Other EU states received 5–10 % of GDP, with WGI scores 0.1–2.1, while non‑EU controls received 1–2 % and WGI scores about 1.5–2.0. WGI changes 2021–2024 vary: Romania and Lithuania gained noticeably; many EU and non‑EU countries saw modest declines or small improvements. Italy’s reforms shortened proceedings, introduced mediation, mandated electronic filing, simplified administration, established an e‑Procurement system, and enabled pre‑populated VAT returns using big‑data analytics. Figures 10–15 provide robustness checks, showing mean estimates, observed versus counterfactual trends, and placebo analyses for EU and non‑EU controls. They also present posterior distributions of residuals and autocorrelation.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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