The article is dedicated to research on relations between size of general government sector and the economy. The aim of this article is determination of the most important values that are used to identify relations between size of the sector and the economy, as well as determination of how frequently they appear in relation to pair of the variables that are being researched. In exploration of relations between the variables that describe size of general government sector and the economy, the authors used methodology that bases on Bayes networks. The object of the analyses was the economies of EU member states and their public finances systems. The period that was selected for the research has covered the years 2000-2013 (inclusive). In order to describe economies, the authors selected 18 variables, whereas to describe general government sector 15 variables. All variables were sourced from databases of Eurostat, OECD and World Bank. Among economy's measures and general government sector's measures, there were also some benchmarks found as standard ones (classical ones) as well as measures proposed by the authors, which were not used in the scientific descriptions that were dedicated to researches on sizes of general government sector. Ipso facto, this article fits in the discussion on, general government sector and optimization of its size, and at the same time it provides starting point for further research on sector's size and its influence on economy.

JEL classification: E62, H11, H20, H50, H60 Keywords: economy, central government, general government sector, economy, public finance, relationship between economy and general government sector size Received: 17.07.2015 Accepted: 13.10.2015 www.e-finanse.com This article is dedicated to a study of the relations between the economy and the size of the general government sector. The main aim of the article is an identification of the most important variables that are used to determine relations between the economy and size of the sector, as well as to identify frequency of their occurrences in relations to pairs of variables which describe an economy and the size of the sector. In order to explore these relations, the authors used Bayes networks. The economies of EU member states and their public finance systems were the object of analyses in this article. The period that was selected for the research covered the years 2000-2013 (inclusive). In order to describe economies, the authors selected 18 variables, whereas to describe the general government sector -15 variables. These variables were sourced from databases of Eurostat, OECD and the World Bank. Among an economy's measures and general government sector measures, there were also some benchmarks found (standard and classic) as well as measures proposed by the authors, which had not been used in the scientific descriptions that were dedicated to research on size of the general government sector. Ipso facto, this article fits in the discussion on not only the size of the general government sector, but also attempts to answer the question of whether the economy determines the size of the sector. To date, the research questions on the impact of the size of the general government sector on the economy of a particular country have been common. This article inverts the investigated dependence and its content concentrates on the attempt to determine if the size of the sector in a particular country is a function of its economy expressed by ratios adopted in conducted the research.

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Abstract

An assessment of the financial condition of local government units (LGUs) is usually carried out in a manner referring to traditional tools and methods based on financial analysis. However, it turns out that this approach is unreliable. There are known examples of LGUs, which, despite current reporting concerning their financial situation to the authorities controlling their financial economy, not only did not avoid financial problems (see Rewal, Dziwnów, Byczyna communes), but as a result of the improper management of public funds they were liquidated (e.g., Ostrowice commune). The finding presented above raises pertinent questions about the effectiveness of the current way of assessing the financial condition of local government units and on this basis arriving at conclusions and estimations relating to the possible consequences of the situation in local finance for the future of LGUs. Given the above, attempts to develop new solutions to assess the financial situation of LGUs are becoming more frequent. The aim of this article is to build a synthetic measure for the assessment of the financial condition of communes with regard to all basic statistics describing local government finances and making use of the TOPSIS methodology. The constructed measure does not focus on the estimation of individual financial measures but rather takes into account their interrelationships and interactions. It eliminates the problem of the lack of relationships between the analyzed result values, which may be responsible for the incorrect interpretation of the financial conditions of local government units. The value of the obtained measure allows for an objective assessment of the condition of LGUs finances, providing synthetic information concerning the multi-sectional assessment of the condition of local government finances.