Side Effects of Fiscal Rules: a Case of Polish Local Self-Government

Banaszewska, Monika

doi:10.18559/ebr.2018.1.6

Cited by 3 publications

(2 citation statements)

References 9 publications

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“…Two dimensions of comparison have been used: the spatial differentiation of these rules (between municipalities in one country or internationally) (Johnson and Kriz, 2005; Feld and Kirchgässner, 2008; Foremny, 2014; Kotia and Duarte Lledó, 2016) and comparisons over time (i.e. in the periods before and after new regulations are imposed) (Banaszewska, 2018; Grembi et al , 2012; Llera and Garcìa Valiñas, 2013). We contribute to this literature by analysing such a change in the fiscal rules concerning LG’s debt and Poland’s recent deficit.…”

Section: Literature Reviewmentioning

confidence: 99%

Do fiscal rules of local debt affect municipal off-budget activities? Analysis of various types of municipalities

Białek‐Jaworska

Kopańska

2023

MEDAR

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Purpose This paper aims to determine whether local governments (LGs) use non-consolidated municipally owned companies (MOCs), excluded from public sector entities and, consequently, from sub-national debt to avoid fiscal debt limits. This paper contributes to the literature by analysing the fiscal debt rule’s impact on the off-budget municipal activities in total and separate in different types of local government units. Design/methodology/approach This paper uses difference-in-differences and the system general method of moments model with the Blundell–Bond estimator for dynamic panel data analysis of MOCs owned by 866 Polish municipalities in 2010–2018. Findings This paper shows that the MOCs’ revenues support limited local public debt capacity by indebtedness restrictions imposed on municipalities in 2014. As a result, less indebted municipalities have higher off-budget revenues. The tightening of fiscal rules related to sub-sovereign indebtedness increased off-budget activities, but that effect is much stronger in rural and rural–urban municipalities than in urban municipalities and big cities. Originality/value This paper contributes to the literature by exploring the fiscal debt rule’s impact on the off-budget municipal activities in total and separate in different types of local government units. In this paper, the authors combine theories relating to private and public finance; this is a novel approach and one that is also necessary – as, in fact, the worlds of public and private actors intersect – as exemplified by the existence of MOC.

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Section: Literature Reviewmentioning

confidence: 99%

Do fiscal rules of local debt affect municipal off-budget activities? Analysis of various types of municipalities

Białek‐Jaworska

Kopańska

2023

MEDAR

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“…243 [Ustawa z 27 sierpnia 2009] na gospodarkę finansową danego samorządu było silniejsze -zob. [Banaszewska 2018].…”

Section: Wstępunclassified

Finansowanie inwestycji samorządowych ze środków zwrotnych w środowisku rosnących nadwyżek operacyjnych

Kluza¹

2018

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu

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Streszczenie: Inwestycje jednostek samorządu terytorialnego po 2008 r. w znacznej mierze były finansowane z zewnętrznych środków zwrotnych. Od 2014 r. występuje jednak tendencja spadku zadłużenia samorządów oraz wzrostu ich nadwyżek operacyjnych, co wskazywałoby na istotną zmianę w źródłach finasowania inwestycji samorządowych. Dane dla całego sektora wskazują, iż przeciętny samorząd uniezależnił się od finansowania zewnętrznego przy realizacji swych inwestycji. W artykule weryfikowana jest ta hipoteza w oparciu o modele regresji liniowej uwzględniające dane dla poszczególnych jednostek z lat 2009-2016 z uwzględnieniem kategorii i lokalizacji danego podmiotu. Przeprowadzone analizy wykazały, iż wnioskowanie w oparciu o średnie dla sektora jest bardzo zwodnicze. Zewnętrzne finansowanie zwrotne pozostaje nadal istotnym źródłem środków dla samorządów przy realizacji inwestycji, a zapotrzebowanie na nie jest statystycznie różne w zależności od kategorii danego podmiotu i jego lokalizacji.Słowa kluczowe: jednostki samorządu terytorialnego, inwestycje, nadwyżki operacyjne, zadłużenie.Summary: Investments of local governments after 2008 were largely financed by external debt. Since 2014 there has been a tendency of decreasing indebtedness of local governments and increase in their operating surpluses, which would indicate a significant change in the sources of their investment financing. Data for the entire sector indicate that the average local government has become independent of external financing in the implementation of its investments. This article verifies this hypothesis with a use of models estimated for individual entities for the years 2009-2016. The analyzes showed that inference based on the averages for the sector is misleading. External debt remains an important source of funds for local governments in the implementation of investment policies, and the demand for external financing is statistically discriminated depending on the category of the given entity and its location.

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Spatial interactions in local public debt. Evidence from Poland

Banaszewska

2023

EBR

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The aim of the paper is to investigate spatial interactions among the debt of 2,442 municipalities in Poland over the period 2005–2020. Using dynamic spatial Durbin model with two-way fixed effects it provides empirical evidence of positive spatial interactions. It is estimated that an increase in debt per capita in a given municipality by PLN 100 leads to an increase in the debt per capita in neighbouring municipalities by PLN 8–10. The result is robust to the various specifications of spatial weight matrix (contiguity vs. inverse-distance with a cut-off). It is also found that municipal debt in Poland suffers from high persistence over time.

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Side Effects of Fiscal Rules: a Case of Polish Local Self-Government

Cited by 3 publications

References 9 publications

Do fiscal rules of local debt affect municipal off-budget activities? Analysis of various types of municipalities

Do fiscal rules of local debt affect municipal off-budget activities? Analysis of various types of municipalities

Finansowanie inwestycji samorządowych ze środków zwrotnych w środowisku rosnących nadwyżek operacyjnych

Spatial interactions in local public debt. Evidence from Poland

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