ASSESSMENT OF SPATIAL DIFFERENTIATION OF FINANCIAL INDEPENDENCE OF POVIATS IN POLAND (2007-2019).

Date01 June 2022
AuthorDziekanski, Pawel
  1. Introduction

    A poviat is an independent entity with autonomy in the use of resources in the process of carrying out public tasks. Its local resources (economic, financial, social and information resources) determine the level of development. The effectiveness of poviats' operations requires an appropriate level of financial situation and the appropriate shaping of resources and principles of operation, or setting goals and methods of achieving them (Dziekanski, 2021). The independence of poviats is a self-governing activity in the implementation of public tasks.

    The basis for the proper and effective operation of poviats is the provision of appropriate financial resources (Dyk, 2012). They consist of both the so-called own income as well as transfers from the state budget in the form of, inter alia, general subsidies and targeted subsidies. The process of poviat financial management relates to their current functioning as well as to strategic activities. The assessment of the financial situation and independence, with the use of appropriate tools, provides information about the current situation of poviats, allows for the determination of differences in relation to other units, as well as for the determination of development opportunities or determination of their attractiveness (Dylewski, 2011). It is a spatially polarized phenomenon. Particular poviats differ from each other in terms of the degree of development and potentials: demographic, economic, financial, social, and innovative potential (Kalinowski, 2005).

    Determinants of the financial situation of poviats may be shaped by the area in which they occur, and may also be independent of it (Dennis, 2004; Standar, 2017). The possessed financial resources constitute the foundation of the poviats' functioning and condition the implementation of all kinds of tasks, the provision of local public services in a continuous and effective manner, as well as the settlement of related financial obligations (Bath, 2001; Navarro-Galera et al., 2016; Stavins, Wagner and Wagner 2003). Knowledge of the state of finances allows local authorities to make comparisons with other entities and is helpful in making financial decisions (Stanny and Strzelczyk, 2018).

    Financial independence may be the subject of analysis, both in legal and economic terms (Filipiak, 2011; Poniatowicz, 2018; Surowka, 2019). Kopanska points out that independence should be treated as a relative value of the poviat, as it constitutes the power to independently make decisions about one's own development (Kopanska, 2003; Siregar and Pratiwi, 2017). Jastrzebska points out that she considers the essence and scope of independence in terms of subjects and objects (Jastrzebska, 2004). Self-government independence should not be equated with complete independence from the state, but with a precise definition of the scope of interference by the state administration in the area of independent operation of local self-government bodies. It is difficult to assess the degree of financial independence of local government units (Tarno, 2004; Strzelecki, 2014).

    The authors equate financial independence with the description of the financial situation of local government units. It is an important aspect of the functioning of poviats which, along with communes, perform most of the public tasks determining the quality of life, access to social services, culture, education, infrastructure, and public investments, thus shaping financial security and the ability to pay liabilities and perform tasks (Stanny and Strzelczyk, 2018; Kotarba, 2014; Zales'ny, 2015).

    Financial independence can be considered on the basis of various levels (income, expenditure, organizational, financial, etc.) on which it occurs. It depends on the type of a given unit, the ability to raise funds, owned assets, the location of a given local government unit (the so-called location rent), its tourist and landscape values and infrastructure development (Marcysiak and Prus, 2017; Prus and Sikora, 2021). The independence of self-government is determined by many important legal issues, among which a special role is played by the legal personality of poviats, equipping them with certain assets, and decentralization of public authority in close connection with the principle of subsidiarity (Poniatowicz, 2015). This indicates a holistic (systemic) approach to the analyzed problem. An important problem in assessing the degree of financial independence of local government units is the selection of appropriate measures. The factor which determines the degree of actual independence is the adjustment of income to the expenses that it has to incur while performing the statutory tasks.

  2. Materials and methods

    The main aim of the article is to assess the spatial differentiation of the level of financial independence of poviats in Poland in 2007-2019 using a synthetic measure. The presented years of analysis result from the programming period of EU funds, hence 2007 is the beginning of the programming period (2007-2013), 2019 is the last year of complete and up-to-date data collected at the level of poviats in Poland (related to the programming scope 2014-2020).

    Empirical data on poviats in Poland was collected with information available from the Local Data Bank of the Central Statistical Office (BDL CSO) (Statistics Poland, 2019b). A poviat (LAU 1, Figure 1) is a local self-government community, all inhabitants and territory, i.e. a unit of basic territorial division, covering the area from a few to a dozen or so communes, or the entire city area with poviat rights (i.e., municipalities with the status of a city to which poviat rights have been granted). Cities with poviat rights were excluded from the analysis due to their specificities. They are a specific combination of commune and poviat self-governments, hence the scope of their tasks is extended, as they carry out not only commune tasks, but also poviat tasks (Statistics Poland, 2019a; Regulation of the Council of Ministers of August 7, 1998; Act of July 24, 1998; Act of June 5, 1998). The research area is mainly arable land (60.0% of country area), forests (30.2%), other building elements, such as residential areas, industrial areas, recreation and leisure areas, land under water and agricultural--wasteland (as of December 2019).

    In research on the financial independence of poviats in Poland, and especially in spatial comparative analyzes, it is helpful to use a synthetic measure. The measure replaces a large set of diagnostic features describing the financial independence of poviats (Table 1). In the conditions of a changing local economy, the level of financial independence is determined by many socio-economic and political factors. The differences that can be noticed in the principles of constructing these measures concern the method of taking into account the characteristics of stimulant (S) and destimulant (D), selection of the normalization formula, and determination of the analytical form of the aggregating function. Regular financial independence tests allow for the verification of the achievement of poviat goals. The measure allows for control of financial independence (Prus et al., 2021; Dziekanski et al., 2020; Dziekanski and Prus, 2020).

    The analysis of the financial independence of poviats from the point of view of the possibility of free disposal of incomes and the implementation of expenses was made on the basis of a set of variables, described in Table 1. Selected indicators show the financial independence of a given unit in relation to the income and expenditure side of the budget, or provide more precise information on the financial independence of the audited local government unit.

    In the analysis of the spatial differentiation of the financial independence of poviats, a synthetic measure was based on the procedure presented in Table 2.

    In order to build a synthetic measure of financial independence, the selection of diagnostic variables was adopted as the first step. When it comes to analyzing spatial differentiation, data availability is key. The choice of the variable was made on the basis of the current research literature, as well as the availability of data (as part of the BDL CSO). From the set of variables, those characterized by low spatial variability (coefficient of variation < 0.10) and high correlation of variables (according to the inverted matrix method; Table 1, point 1) were removed. All variables selected for the analysis are characterized by sufficient discriminant ability (variables X2, X3 were removed from the study) (Malina, 2004).

    In the next stage of the study, the variables were divided into stimulants and destimulants, taking into account the direction of the preferences of the variables in relation to the analyzed research criterion. Most of the variables are obvious and result from the substantive experience of the researcher and the analysis of the literature (Table 1, point 2) (Grabinski, 1985).

    The process of normalization of variables was performed successively in accordance with the zero unitarization method (Rogowski and Krysiak, 1997; Hellwig, Siedlecka and Siedlecki, 1995; Hellwig, 1968; Hellwig, 1990). The goals of unitarization are to standardize the nature of the variables, to bring the different variables to mutual comparability, to replace the different ranges of variability of individual variables with a constant range, to eliminate negative values from the calculations (Table 1, point 3) (Kolenda, 2003).

    The last step was to determine a synthetic measure (describing the financial independence of poviats) based on the TOPSIS method (Technique for Order Preference by Similarity to an Ideal Solution) (Wojcik-Len et al., 2019). The higher the index value (qi [0,1]), the higher the level of financial independence (Hwang and Yoon, 1981 apud Bieniasz, Golas' and Luczak, 2013; Pietrzak, 2016; Behzadian et al., 2012).

    This method allows the...

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