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There are numerous examples of when EU-funded projects were implemented according to all regulations, but their use fell short of expectations. Those include roads, airports and trains which were hardly used. Planning failures, misallocations and yielding to specific interest groups could explain such fiascos.



Over the past fifteen years, there has been an increased focus on measurable results in the EU budget to limit such adverse projects. In the jargon, the financing method which is not based on the actual costs of a project, but on the achievements reached, is called ‘performance-based funding’.



The EU Recovery and Resilience Facility (RRF) is performance-based, but only in name. The RRF Regulation does not require the achievement of results in the commonly understood sense, but instead “measures of progress towards the achievement of a reform or an investment". The European Commission guidelines for preparing recovery plans by EU national authorities, to access RRF funding, explicitly discouraged result indicators.



Perhaps for this reason, there are major differences in the use of result indicators in national recovery plans.



For example, France, Germany and the Netherlands adopted very few result indicators but instead focused on input indicators (e.g., how much money is spent) and output indicators (e.g., whether a road is built). In contrast, the Finnish, Italian and Romanian plans included quite some result indicators and few input indicators.



For any future performance-based EU instrument, results indicators must be given a prominent role. It would also be important to compare the levels of ambition and expected achievements of different countries, which, unfortunately, has not been done for the RRF.

The Why Axis is a weekly newsletter distributed by Bruegel, bringing you the latest research on European economic policy.