The economic activity of local self-government entities as public entities in Poland - exception or rules

Author:Wioleta Baranowska Zajac
Position:Department of the Law of Local Self Government, Faculty of Law and Administration, University of Szczecin, Poland
Pages:281-295
The economic activity of local self-government entities
as public entities in Poland exception or rule?
Assistant professor Wioleta BARANOWSKA-ZAJĄC
1
Abstract
The economic activity of local self-government entities entails considerable
controversy in Poland. There is no uniform view among the representatives of judicial
doctrine and jurisprudence as to the admissibility of economic activity by local self-
government entities, and when accepting the possibility of co nducting such activity - as to
the characteristics of such a ctivity. The doubts also arouse the scope, object and possible
forms of economic activity of local self-government. On the one hand, in the situation
where legislator increa ses the number of pub lic tasks given to self-gove rnment to perform,
and members of local communities are demanding an increase in the quality of performed
tasks, the question of additional sources of income, including possibility of condu cting
economic activity by local self-government entities, as a way to raise funds, becomes
important. On th e other hand, the pursuit gainful activity by entities of public
administration creates the risk of their focus on profit maximization, and thus pursuit
public objectives becoming of secondary importance. Pursuit b usiness activity by local self-
government is no w permissible in Poland, but it is subject to many limitations. They relate
to the nature of tasks that could be carried out within this activity as well as its
organizational forms. The purpose o f the study is to analyse the legal provisions, which are
in force in Polish legal system, aimed at identifying and determination of the conditions for
using the possibility of pursuit a business activity by lo cal self-government units and
evaluation th eir impact on the effectiveness of the performance of self-government public
tasks.
Keywords: economic activity, local self-government, public entities, exception, rule .
JEL Classification: K23
1. Introduction
The entitlement to conduct economic activity by local government units
finds both its opponents and supporters. The arguments against the admissibility of
such activity include, in particular, the lack of the ability of the public-law
association to carry out the effective activity in a market economy, improper
management of municipal property, the possibility of local self-government to use
its monopoly position, the danger of distorting the essential role of local self-
government, i. e. an excessive focusing on conducting economic activity can
weaken the activity in performing tasks aimed at directly meeting the needs of
1
Wioleta Baranowska-Zając - Department of the Law of Local S elf-Government, Faculty of Law and
Administration, University of Szczecin, Poland, w.baranowska-zajac@wpiaus.pl.

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