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The Role of Local Finance in Overcoming Socioeconomic Inequalities in Polish Rural Areas

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  • Aldona Standar

    (Department of Economics and Economic Policy in Agribusiness, Faculty of Economics and Social Sciences, University of Life Sciences, Wojska Polskiego 28, 60-637 Poznan, Poland)

  • Agnieszka Kozera

    (Department of Finance and Accounting, Faculty of Economics and Social Sciences, University of Life Sciences, Wojska Polskiego 28, 60-637 Poznan, Poland)

Abstract

Poland is affected not only by a persistent regional differentiation but also by an internal polarization of regional development levels, particularly in rural areas. Local government authorities, especially municipalities, play an important role in bridging inequalities in socioeconomic rural development. This is because the investment capacity depends on the efficiency and effectiveness of local public finance. Note that the fight against inequalities is related to the issues of sustainable development. Therefore, the main purpose of this paper is to assess the changes in the level of socioeconomic inequalities between rural municipalities and the importance of local public finance in bridging these inequalities, as illustrated by the example of Poland. The objective formulated above emanates from the research hypothesis advanced by the authors which assumes that a strong relationship exists between one’s own income and investment potential, on one side, and the socioeconomic development level of Polish rural municipalities, on the other. In the first stage of research, the levels of socioeconomic development of the municipalities surveyed were assessed with a synthetic indicator estimated using the TOPSIS method (Technique for Order Preference by Similarity to an Ideal Solution). The indicator served as a basis for building the typological classes of socioeconomic development at the municipal level. Following this, selected descriptive statistics methods were used to describe the typological classes of socioeconomic development. The second stage of research consisted of assessing the quantitative relationships between the development level and the financial situation of entities surveyed. This was done using the Pearson linear correlation coefficient and the pseudo-test of differences of means. As demonstrated in the analyses, Polish rural municipalities witnessed an improvement in their socioeconomic development level and a simultaneous reduction in development disparities. Also identified were the relationships between local public finance and development levels of rural municipalities. The empirical study also allowed us to confirm the research hypothesis formulated in this paper.

Suggested Citation

  • Aldona Standar & Agnieszka Kozera, 2019. "The Role of Local Finance in Overcoming Socioeconomic Inequalities in Polish Rural Areas," Sustainability, MDPI, vol. 11(20), pages 1-28, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5848-:d:278893
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    2. Andrzej Pawlik & Paweł Dziekański & Jarosław W. Przybytniowski, 2021. "Influence of Financial Variables on the Development of Rural Communes of Eastern Poland in 2009–2018," Risks, MDPI, vol. 9(8), pages 1-22, August.
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    4. Agnieszka Kozera & Małgorzata Dworakowska-Raj & Aldona Standar, 2021. "Role of Local Investments in Creating Rural Development in Poland," Energies, MDPI, vol. 14(6), pages 1-30, March.
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    6. Claudia Jazmín Galeano-Barrera & María Eugenia Arango Ospina & Edgar Mauricio Mendoza García & Dewar Rico-Bautista & Efrén Romero-Riaño, 2022. "Exploring the Evolution of the Topics and Research Fields of Territorial Development from a Comprehensive Bibliometric Analysis," Sustainability, MDPI, vol. 14(11), pages 1-31, May.
    7. Magdalena Kogut-Jaworska & Elżbieta Ociepa-Kicińska, 2020. "Smart Specialisation as a Strategy for Implementing the Regional Innovation Development Policy—Poland Case Study," Sustainability, MDPI, vol. 12(19), pages 1-21, September.
    8. Ana Nieto Masot & Nerea Ríos Rodríguez, 2020. "Rural Tourism as a Development Strategy in Low-Density Areas: Case Study in Northern Extremadura (Spain)," Sustainability, MDPI, vol. 13(1), pages 1-21, December.
    9. Radoslaw Sobko & Dorota Janiszewska & Luiza Ossowska & Ove Oklevik, 2021. "The Role of the Financial Condition in the Development of Coastal Municipalities in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 688-703.
    10. Skauronė, Laima & Miceikienė, Astrida & Krikštolaitis, Ričardas, 2020. "The Impact of Fiscal Policy Measures on the Financial Autonomy of Rural Municipalities: Case of Lithuania," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2020), Virtual Conference, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Virtual Conference, 10-12 September 2020, pages 157-172, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.

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