Has the LEADER progamme been effective in promoting local rural development? An evaluation on two Romanian regions

The aim of the research was to evaluate the effects of projects developed by Local Action Groups (LAGs) on the economic development of rural areas in two development regions of Romania: North-West and North-East. Using Propensity Score Matching (PSM) we have compared communes belonging and not belonging to a LAG having similar characteristics, observing their differences in terms of outcome variables (turnover, number and employees in non-agricultural firms). Results show that there is not a statistically significant difference in change (2011-2015) of outcome variables between the two groups, both in the whole sample and in each region. This points to a lack of effectiveness of LAGs projects in promoting non-agricultural rural development. Furthermore, according to regression results, the outcome indicators are significantly affected by the degree of socio-economic development at the beginning of the examined period.