Growing Euroscepticism across the European Union (EU) leaves open questions as to what citizens expect to gain from EU Membership and what influences their dissent for EU integration. This paper looks at the EU Structural Funds, one of the largest and most visible expenditure items in the EU budget, to test their impact on electoral support for the EU. By leveraging the Referendum on Brexit held in the United Kingdom, a spatial RDD analysis offers causal evidence that EU money does not influence citizens' support for the EU. Conversely, the analysis shows that EU funds mitigate Euroscepticism only where they are coupled by tangible improvements in local labour market conditions, the ultimate objective of this form of EU intervention. Money cannot buy love for the EU, but its capacity to generate new local opportunities certainly can.
We have significantly improved the discussion of the role of local unemployment as a possible outcome of more effective EU policies. We have pursued further tests on this variable and have acknowledged throughout the paper the possibility that lower Euroscepticism in presence of improved labour market conditions may be a direct result of the effectiveness of European policies.
We have discussed in great depth our identification strategy and the reasons why, given some data constraints, a classic RDD appears more suitable than a fuzzy RDD in our setting. We have extensively discussed the reasons why Cornwall does not represent a suitable setting for a causal analysis similar to the one we perform for West Wales and, therefore, it cannot be added as a second case study in our study.
We have updated and improved the balancing tests and added some key robustness tests (e.g. estimates with wild-bootstrapped standard errors).
We have slightly amended the title of the article putting a stronger emphasis on Euroscepticism. We have also better clarified in the introduction that the paper leverages Brexit in order to study a much wider question on the way in which EU funds may influence Euroscepticism. Overall introduction and conclusions have been amended to further reinforce the placement of the paper into current scholarly and policy debates.