The subject of the paper is the discussion on horizontal redistribution of public revenues among local self-government units. The assumed aim of this redistribution is to equalize the different levels of income and burden of expenditure. The paper lists desirable features of this redistribution, motives for its application, and arguments of its opponents. The analysis of the latter shows that while part of the criticism refers to the essence of horizontal redistribution, significantly more of it concerns the dysfunctions of its mechanism which became apparent after 2008. The criticism focuses, for example, on the criteria for making compensatory payments, the structure of tax revenue indices, the so-called reference period, the amounts of compensatory payments, the criteria for the distribution of the collected amounts. The paper includes suggestions concerning recommended directions of changes in the mechanism of this redistribution.
The main goal of the article was to verify gains and losses coming from participating in the global economy in the light of the core–periphery theory. It turned out to be undeniably true that transfers of industrial production to peripheral countries lead to higher living standards and indirectly favour political stability in core countries, while the hypothesis that the global financial market is a tool for exploitation of peripheral countries was proved to be false. The author established that financial speculations in core countries cause political destabilization in peripheral countries, and disproved the hypothesis that the higher the participation of periphery countries in the global economy, the higher the losses they suffer and the higher the advantages in core countries.
Local governments in the Western Balkan countries are dependent on central governments’ transfers, with low fiscal autonomy and limited efforts for own-source revenue mobilisation. The paper identifies that besides central government transfers, other significant factors in determining municipal own-source revenues include central and local public investment, current expenditures, human development index, and population density. Municipal own-source revenue is adversely affected by intergovernmental transfers, implying their de-incentivising effect in collecting local revenues. Local capital expenditure is a significant and strong determinant with a higher strength than central government investments, suggesting their importance for local fiscal autonomy. The human development index as a composite measure, unlike GDP per capita, positively affects the municipal fiscal autonomy.
The paper describes an indicator constructed to measure financial flows between local governments in Poland. These flows are considered as the measure of local governments’ cooperation and of the strength of functional connections crossing administrative boundaries. The purpose of this paper is to present the scale and the subject of financial transfers between local governments and the factors explaining the variation of local governments’ financial cooperation. The biggest financial transfers take place in functional urban areas, but only in terms of current expenditures. Transfers of investments expenditures are higher outside these areas and are characteristic of less affluent municipalities. The strongest associate function is to provide transportation services: both in terms of current expenditures and investments.
The article presents the results of the analysis of the impact of the National Development Plan (NDP) 2004–2006 and the National Strategic Reference Framework (NSRF) 2007–2013 on divergence/convergence processes taking place in Poland as well as between its regions and the EU average, measured as GDP per capita in PPS. The analysis was made using simulation results received by applying 16 regional HERMIN models and data as well as forecasts concerning NDP and NSRF transfers prepared by the Ministry of Regional Development of the Republic of Poland. The application of HERMIN models allowed the authors to make forecasts regarding the following macroeconomic indicators: GDP per capita (in PPS) in relation to the EU average and to the national average by 2020. The results indicate that NDP and NSRF implementation can accelerate the convergence process between the Polish regions and the EU average and slow down the weak divergence process within the country.
Horizontal transfers in the local government financial equalization system have been raising a lot of controversies in Poland during the last few years. The paper shows similar instruments functioning in other European countries: Spain, Switzerland, Germany, Denmark, Sweden, and Norway. The paper discusses two mechanisms of equalization: that of revenue and of expenditure needs. European experience is discussed in a way which makes it possible to draw comparisons with regulations in Poland as well as with current debates in Poland.
The paper is an attempt to answer few questions, which are of crucial importance for the assessment of local government financing in Poland. The main focus of the paper is on inter-governmental financial transfers. What are goals and principles of inter-governmental grants in the theory of fiscal federalism? How these principles are applied in European countries? How the practice of local finance in Poland is related to these principles and to international experience? The first section deals with theoretical issues of grants` transfers and equalization schemes. The second part includes a brief description of grant systems in selected European countries. The third section concentrates on the evaluation of the Polish practice, and includes recommendation fo future changes. However, the paper skips a detail description of the Polish grant system (which is well-known and described in Polish academic literature).
