Structural Policies in Finnish Provinces in 2000-2006: A Social Accounting Matrix

This paper investigates the effects of the EU structural and agricultural policies on rural areas of different economic structures. The two Provinces that were chosen to represent these different structures are South Ostrobothnia with an agriculture-dependent economy and North Karelia with a more mixed structure of production. Social Accounting Matrices (SAMs) were constructed for both Provinces to analyse the effects of structural policies between 2000-2006, which will be both the third Community Support Framework and and the Agenda 2000 period. Three different policy scenarios were formulated: Agenda 2000, trend and non-cohesion scenarios. Agenda 2000 would have negative effects on South Ostrobothnia, whereas North Karelia would benefit from the proposed increase in structural funds in the new Objective 1, thus having an overall positive effect. South Ostrobothnia would clearly benefit if the trend scenario would be realised so that the current support levels would be extended to the next programme period. Both of the study regions would suffer from a shift to an EU-wide non-cohesion structural policy.