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Liabilities of Local Government Units in Poland: Identification and Analysis of Diversification Factors

Author

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  • Alinska Agnieszka
  • Kosztowniak Aneta
  • Wajda Marcin

Abstract

Purpose: The article aims to identify the factors that influence the levels of debt in Polish local governments. Specifically, we look at the structure of local units' revenue and expenditure and try to determine which of the characteristics have a significant impact on debt levels. Design/Methodology/Approach: We divide our analysis into three types of municipalities, urban, rural, and urban-rural municipalities. We find that each of this type of municipality has different determinants of debt level. Findings: This article provides a solid recommendation for researchers and policy makers to carefully derive conclusions from analyses made on the total population of local units, as their heterogeneity may significantly impact the research results. Therefore, policy recommendations and actions should not be homogeneous across all types of local governments. Practical Implications: The article identifies income factors of local budgets that are statistically significant and influence positively or negatively the size of the public debt of local government units. Practical aspect of the paper means that results can be used to manage local government units or assess their stability by external agencies. Originality/Value: The obtained results are in line with the previous research results and extend the knowledge in the stability and indebtedness of local government units. The study carried out allows to extend this knowledge and proves that the indebtedness of local government units is also affected by the structure of income of these units.

Suggested Citation

  • Alinska Agnieszka & Kosztowniak Aneta & Wajda Marcin, 2021. "Liabilities of Local Government Units in Poland: Identification and Analysis of Diversification Factors," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 113-134.
    • Handle: RePEc:ers:journl:v:xxiv:y:2021:i:2b:p:113-134
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    References listed on IDEAS

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    More about this item

    Keywords

    Local government unit (LGU); financial stability.;

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance

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