EU's rural development policy at the regional level—Are expenditures for natural capital linked with territorial needs?

The restoration and improvement of natural capital (NC) in rural areas represents one of the main objectives of the EU's rural development policy (RDP). In addition to creating environmental and biodiversity benefits, NC represents an important territorial asset and a basis to generate socio-economic second-order effects for economic competitiveness and rural viability. However, the regional capability to valorise NC depends on the specific regional context, needs and potentials, as well as targeted policy support. It has therefore been questioned whether RDP sufficiently considers territorial aspects. Based on a previous study, which distinguished RDP (2007–2013) funding priorities and regional expenditure patterns, this paper focusses on European regions (NUTS2/3) characterised by above-average relative expenditures for measures related to NC support. Building upon the hypothesis that priority setting in regional RDP programming and expenditures depends on the regional context, this study aimed to improve the understanding of priority setting in NC support in relationship to other RD objectives by taking a closer look at the conditions of regions and their communalities. By analysing the variances and spatial dependencies of regional socio-economic, environmental and agricultural framework conditions and applying statistical logit models, this study found that the probability to adopt specific NC-oriented expenditure patterns in a region can only be partly explained by these factors. While environmental variables, such as designated areas and High Nature Value (HNV) farmland, do not drive high NC expenditures, factors representing agricultural structures and conditions seem to have a larger influence. Regional RDP expenditure pattern showed an additional strong dependency from spatial association factors.