‘Why organizations leave money on the table: explaining non-demand for EU funds’

The effectiveness of EU funds depends on their full and proper absorption, yet even regions with high administrative capacities face difficulties in the use of funds. This calls for more attention to a puzzling aspect: numerous potentially eligible organizations do not apply for EU funds. Unlike most previous studies, this analysis examines non-demand and a region with high administrative capacities. The first broad empirically grounded analytical framework of non-demand for EU cohesion funds is developed based on in-depth interviews with actual and potential beneficiaries and experts. It shows the main drivers for non-demand: unawareness of the offer, high administrative burden, and low perceived need for additional funding. Moreover, organization type and size are important moderators. Non-demand also causes adjustments in the supply of funds. These findings suggest that future EU implementation research should expand its focus to examine (non-)demand, as well as its dynamic interplay with the administration.