General grants and development – a relationship without a future? The effects of the structure of general grants on the development of local government units in Poland
DOI:
https://doi.org/10.4335/13.3.915-932(2015)Keywords:
general grants, subsidy, development, local government, local government revenues, investment expenditure, specific grants, PolandAbstract
The purpose of this paper is to attempt to identify the reasons for the lack of relationship between general grant revenue and investment expenditure of local government units. The author formulated the hypothesis that there is no link between general grants and investment expenditure and that the reason for this are the current spending on education, absorbing the entire amount of general grants received by local government units. The hypothesis was verified in a procedure consisting of several steps. The theoretical part contains a description of the revenue system of local government units in Poland with particular emphasis on transfers, including general grants. Although the local government in Poland is a three-tier system (communes, counties, provinces), the investigation presented in the analytical part was carried out for four groups of units, also identifying cities with county rights. On the basis of the results of statistical analysis and a comparison of revenues from the education component of the general grants and the overall amount of general grants with expenditure on education, the most likely explanation is the size of expenditure on education, which often exceeds the total revenue from the general grants.
References
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McClave, J. T., Benson, P. G. & Sincich, T. (2008) Statistics for business & economics (New Jersey, USA: Pearson Education Inc).
Ofiarski, Z. (2002) Subwencje i dotacje jednostek samorządu terytorialnego (Warszawa: Difin).
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Pickvance, Ch. (2002) Settlement type and local government environmental policy in Hungary: the role of local economic structure and local government resources, European Environment, 12(2), pp. 90-104, doi: 10.1002/eet.285.
Radvan, M. (2014) Tax Law as an Independent Branch of Law in Central and Eastern European Countries, Lex Localis - Journal of Local Self-Government, 12(4), pp. 813-827, doi: 10.4335/12.4.813-827(2014).
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Sekuła, A. (2009a) Kryteria przyznawania subwencji ogólnej jednostkom samorządu terytorialnego, In: Korenik, D. (ed.) Finanse i Rachunkowość, Zeszyty Naukowe 28 (Wrocław: Wyższa Szkoła Zarządzania i Finansów), pp. 73-85, doi: 10.13140/2.1.1336.4000.
Sekuła, A. (2009b) Struktura subwencji wybranych powiatów ziemskich województwa pomorskiego – analiza porównawcza z lat 2005-2007, In: Filipiak, B. (ed.), Ekonomiczne i organizacyjne instrumenty wspierania rozwoju lokalnego i regionalnego. T II, Ekonomiczne Problemy Usług, nr 31 (530) (Szczecin: Uniwersytet Szczeciński), pp. 107-115, doi: 10.13140/2.1.5005.9044.
Sekuła, A. (2009c) System of specific grants for local government units in Poland, In: Bucek, M., Capello, R., Hudec, O. & Nijkamp, P. (eds.) 3rd Central European Conference in Regional Science (Kosice: Technical University), pp. 755-760, doi: 10.13140/2.1.1557.5842.
Starkie, D. (1984) The Specific Effect of Specific Road Grants in South Australia, Australian Economic Papers, 23(42), pp. 27-37, doi: 10.1111/j.1467-8454.1984.tb00071.x.
Sol’e-Oll’e, A. (2006) The effects of party competition on budget outcomes: empirical evidence from local governments in Spain, Public Choice, 126(1-2), pp. 145-176, doi: 10.1007/s11127-006-2456-9.
Wilson, E. & Švihlová, D. (2000) The role of Local Government in Environmental Action in Slovakia, Local Environment, 5(3), pp. 255-269, doi: 10.1080/13549830050134211.</span></p>
Alm, J., Buschman, R. & Sjoquist, D. (2009) Economic Conditions and State and Local Education Revenue, Public Budgeting & Finance, 29(3), pp. 28-51, doi: 10.1111/j.1540-5850.2009.00935.x.
Ayogu, M. D. (1999) Before Prebendalism: A Positive Analysis of Core Infrastructure Investment in a Developing Fiscal Federalism, African Development Review, 11(2), pp. 169-198, doi: 10.1111/1467-8268.00008.
Bartle, J., Kriz, K. & Morozov, B. (2011) Local government revenue structure: trends and challenges, Journal of Public Budgeting, Accounting & Financial Management, 23(2), pp. 268 - 287.
Bojorquez, F., Champagne, E. & Vaillancourt, F. (2009) Federal grants to municipalities in Canada: nature, importance and impact on municipal investments, from 1990 to 2005, Canadian Public Administration, 52(3), pp. 439-455, doi: 10.1111/j.1754-7121.2009.00091.x.
Brennan, G. & Pincus, J. (1990) An Implicit Contract Theory of Intergovernmental Grants, Federalism in Australia, 20(4), pp. 129-144.
Carroll, D. A. & Johnson, T. (2010) Examining Small Town Revenues: To What Extent Are They Diversified?, Public Administration Review, 70(2), pp. 223-235, doi: 10.1111/j.1540-6210.2010.02129.x.
Feld, L., Kirchgässner, G. & Schaltegger, Ch. (2010) Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments’, Southern Economic Journal, 77(1), pp. 27-48 , doi: http://dx.doi.org/10.4284/sej.2010.77.1.27.
Finžgar, M. & Oplotnik, Ž. J. (2013) Comparison of Fiscal Decentralization Systems in EU-27 According to Selected Criteria, Lex Localis - Journal of Local Self-Government, 11(3), pp. 651 - 672, doi: 10.4335/11.3.651-672(2013).
Glumińska-Pawlic, J. (2003) Samodzielność finansowa jednostek samorządu terytorialnego w Polsce (Katowice: Uniwersytet Śląski).
Glumińska-Pawlic, J. (2012) Źródła dochodów jednostek samorządu terytorialnego - ograniczenia i perspektywy rozwoju, In: Czaja-Hliniak, I., (ed.) Nauka prawa finansowego po I dekadzie XXI wieku (Kraków: Akademia im. A. F. Modrzejewskiego).
Guziejewska, B. (2005) Kontrowersje w ocenie niezale_no_ci finansowej samorz_du terytorialnego, Samorząd Terytorialny, 7-8, pp. 67-72.
Etel, L. (ed.) (2013) Prawo podatkowe (Warszawa: Difin).
Halmosi, P. (2013) The Effect of the Economic Crisis on Local Governments in OECD Countries, Public Finance Quarterly, 58(3), pp. 293-306.
Hermaszewski, J. (2013) Nadwyżka operacyjna w analizie sytuacji finansowej gminy Sława w latach 2004-2011, In: Brol, R. & Bal-Domańska B. (eds.) Finanse i nieruchomości w rozwoju lokalnym i regionalnym, Prace Naukowe nr 280 (Wrocław: Uniwersytet Ekonomiczny).
Horváthová, L., Horváth, J., Gazda, V. & Kubák, M. (2012) Fiscal Decentralization and Public Debt in the European Union, Lex localis - Journal of Local Self-Government, 10(3), pp. 265-276, doi: 10.4335/10.3.265-276(2012).
Islam, M. & Choudhury, S. (1990) Testing the exogeneity of grants to local governments, Canadian Journal of Economics, 23(3), pp. 676-692.
Kornberger-Sokołowska E. (2004) Kierunki reformy systemu finansów samorządu terytorialnego w Polsce, In: Patrzałek, L. (ed.) Finansowanie jednostek samorządu terytorialnego (Poznań-Wrocław: Wyższa Szkoła Bankowa).
Kozłowski, W. (2012) Zarządzanie gminnymi inwestycjami infrastrukturalnymi (Warszawa: Difin).
Kuhlmann, S. (2010) Between the State and the Market: Assessing Impacts of Local Government Reforms in Western Europe, Lex localis - Journal of Local Self-Government, 8(1), pp. 1-21, doi: 10.4335/8.1.1-21(2010).
Lewis, B. D. & Oosterman, A. (2011) Sub-National Government Capital Spending in Indonesia: Level, Structure, and Financing, Public administration and development, 31(3), pp. 149-158, doi: 10.1002/pad.582.
Mackiewicz, M., Malinowska-Misiąg, E., Misiąg, W. & Tomalak, M. (2007) Budżet i finanse 2007 (Warszawa: Municypium SA).
McClave, J. T., Benson, P. G. & Sincich, T. (2008) Statistics for business & economics (New Jersey, USA: Pearson Education Inc).
Ofiarski, Z. (2002) Subwencje i dotacje jednostek samorządu terytorialnego (Warszawa: Difin).
Oulasvirta, L. (1997) Real and perceived effects of changing the grant system from specific to general grants, Public Choice, 91(3-4), pp. 397-416, doi: 10.1023/A:1004987824891.
Oplotnik, Ž. & Finžgar, M. (2013) EU Member States and Fiscal Decentralization – Empirical Comparison, Innovative Issues and Approaches in Social Sciences, 6(3), pp. 39-64, doi:http://dx.doi.org/10.12959/issn.1855-0541.IIASS-2013-no3-art03.
Panara, C. & Varney, M. (eds.) (2013) Local Government in Europe: the "fourth level" in the EU multilayered system of Governance (New York: Routledge).
Pickvance, Ch. (2002) Settlement type and local government environmental policy in Hungary: the role of local economic structure and local government resources, European Environment, 12(2), pp. 90-104, doi: 10.1002/eet.285.
Radvan, M. (2014) Tax Law as an Independent Branch of Law in Central and Eastern European Countries, Lex Localis - Journal of Local Self-Government, 12(4), pp. 813-827, doi: 10.4335/12.4.813-827(2014).
Sekuła, A. (2013) Does the source matter? Generation of investment expenditure by different types of local government revenue, In: Brol, R. & Sztando, A. (eds.) Local Economy in Theory and Practice. Local Development Governance Aspects, Research Papers no 283 (Wrocław: University of Economics), pp. 32-43.
Sekuła, A. (2009a) Kryteria przyznawania subwencji ogólnej jednostkom samorządu terytorialnego, In: Korenik, D. (ed.) Finanse i Rachunkowość, Zeszyty Naukowe 28 (Wrocław: Wyższa Szkoła Zarządzania i Finansów), pp. 73-85, doi: 10.13140/2.1.1336.4000.
Sekuła, A. (2009b) Struktura subwencji wybranych powiatów ziemskich województwa pomorskiego – analiza porównawcza z lat 2005-2007, In: Filipiak, B. (ed.), Ekonomiczne i organizacyjne instrumenty wspierania rozwoju lokalnego i regionalnego. T II, Ekonomiczne Problemy Usług, nr 31 (530) (Szczecin: Uniwersytet Szczeciński), pp. 107-115, doi: 10.13140/2.1.5005.9044.
Sekuła, A. (2009c) System of specific grants for local government units in Poland, In: Bucek, M., Capello, R., Hudec, O. & Nijkamp, P. (eds.) 3rd Central European Conference in Regional Science (Kosice: Technical University), pp. 755-760, doi: 10.13140/2.1.1557.5842.
Starkie, D. (1984) The Specific Effect of Specific Road Grants in South Australia, Australian Economic Papers, 23(42), pp. 27-37, doi: 10.1111/j.1467-8454.1984.tb00071.x.
Sol’e-Oll’e, A. (2006) The effects of party competition on budget outcomes: empirical evidence from local governments in Spain, Public Choice, 126(1-2), pp. 145-176, doi: 10.1007/s11127-006-2456-9.
Wilson, E. & Švihlová, D. (2000) The role of Local Government in Environmental Action in Slovakia, Local Environment, 5(3), pp. 255-269, doi: 10.1080/13549830050134211.</span></p>
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2015-09-03
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