Impact of COVID-19 Pandemic on Local Finance and Development Strategies. Case of Urban and Rural Areas in the Mazovia Region

Abstract

The paper aims to investigate the economic consequences of the COVID-19 pandemic through the prism of local finances in the Mazovia region. The rationale for this research comes from the observation that lockdown and a reduced economic activity affect revenues of local budgets. Thus, a question arises about the effect of decreased local budgets on local expenditure and the implementation of development strategies. The method applied was a survey carried out on a sample consisting of all the local administrative units (LAU) in the region. The results show that the "scissors effect" of rising expenditure and falling revenues applies to all the LAU. The analysis provides evidence that the characteristics of urban and rural LAU have consequences not only for their resilience against the COVID-19 pandemic but influence their strategies and actions adopted in response to the crisis.

The Impact of the COVID-19 Pandemic on Subnational Finance: Polish Experience

“…Kochanov et al (2020) showing also that the central government does not reduce the consequences of the pandemic related to tax revenue losses. A similar results of the study was also obtained by Mackiewicz et al (2022).…”

Untitled

“…Mackiewicz et al (2022) assessed the economic impact of the pandemic from the standpoint of the local finances of LGUs in the Mazovia region of Poland and provided evidence that the characteristics of urban and rural LGUs affect not only their resilience to the pandemic but also influence their strategies and actions performed in response to the crisis. The lockdown and reduced economic activity have had an impact on local government budget revenues Chernick et al (2020).…”