Successful decentralisation joins public finances and fiscal authority with the responsibility for providing services with functions of local government. The paper deals with decentralisation of public administration in EU countries, focusing on fiscal decentralisation and local government expenditures, allocated for financing the requirements of local and regional sector. Attention is paid to theoretical aspects, reform tendencies, approaches and measuring fiscal decentralisation, but also to the role of local budgets when providing for public services. The research proper is concentrated on the extent of expenditure decentralisation in EU countries over the years 2001-2012 and on mutual relations of local government expenditures, seen as % of general government expenditures, and as % of GDP.
Decentralization of public finance in Poland was an important element of changes in the political system of the country. As a result, some tasks of the state were transferred to the local government level. The Public Finance Act of 2009 introduced new public management methods, such as the performance-based budget and the long-term financial forecast, to the local government finance management. The purpose of this paper was to analyse the budget expenses on cultural tasks incurred by local government units in Poland in the years 2003- 2010 and the impact of the attempted application of the performance budgeting method to local government expenses relating to this field of economy.
Polish Abstract: Rozwoj edukacji jest jednym z priorytetow polityki Unii Europejskiej od początkow jej istnienia. W ciągu ostatnich 15 lat szczegolny nacisk kladziony jest na modernizacje szkolnictwa wyzszego, ktore postrzegane jest jako kluczowe dla rozwoju zarowno calej Unii Europejskiej, poszczegolnych panstw czlonkowskich, jak i indywidualnych obywateli. Postulowane reformy wymagają zmian w obszarze zarządzania, jak i finansowania uczelni, a w szczegolności odejścia od scentralizowanego finansowania zorientowanego na zasoby w kierunku zdecentralizowanego finansowania zorientowanego na wyniki. Transformacja ta powoduje koniecznośc mierzenia efektywności i skuteczności szkolnictwa wyzszego w roznych jego aspektach, w tym rowniez w obszarze edukacji. Artykul koncentruje sie na badaniu mozliwości zastosowania modelu J. Mincera do mierzenia wplywu wyzszego wyksztalcenia na poziom wynagrodzen i wyznaczania tzw. prywatnej stopy zwrotu z inwestycji w edukacje. Badania empiryczne przeprowadzone są na danych pochodzących z niemieckiego badania panelowego SOEP.English Abstract: The development of educational system has been one of the priorities of European Union policy since the beginning of its existence. In the course of the last 15 years particularly strong emphasis has been placed on modernization of higher education, which is perceived as key factor for development of European Union, each member state separately, as well as individual EU citizens. The postulated reforms require changes both in the area of governance and funding of the universities, in particular a shift form centralized input oriented funding mechanisms towards decentralized outcome oriented financing is needed. This transformation causes necessity for measurement of efficiency and effectiveness of various aspects of higher universities activities, including education area. The paper focuses on application of Mincer model in analysis of higher education influence on the level of wages in order to determine the private rate of return to education. Empirical research have been conducted using the data from German Socio-Economic Panel Study (SOEP).
The analysis of the administrative capacity of institutions in the regional development starts from the analysis of the existing framework for the implementation of regional politics in Romania and studies the extent to what the structures and competencies were regionally enlarged as to contribute in the regional development. The basic hypothesis considered for such analysis had in view the fact that the differences recorded with respect to the implementation capacity of the regional development policy are caused by the various levels of the administrative capacity of the national, regional and local institutions existent in Romania. Although the regional development activity is, both centrally and regionally, dominated by the Regional Operational Programmme 2007-2013 (ROP) implementation, significant activity also exists outside the ROP, but only regionally. The regional strategies incorporate to a great extent the strategic objectives established nationally, being coordinated with the national financing instruments for economic, social and territorial development. The undertaking degree of responsibilities regarding the objectives fulfillment of the regional development policy is relatively low both regionally and locally, and the main indicator which contributes in sustaining this conclusion is the absence of an adequate level regarding the property holding on certain strategies and also the methodological lack of strategies. Nationally, the current activity of Ministry of Regional Development and Tourism in the field of regional development totally overlaps the management activity of ROP. The management of structural funds 2007-2013 granted through ROP deals with various situations in which, due to the fact that the Law of regional development remained behind the legislation for the structural instruments implementation in Romania, additional resources are necessary to be granted in order to be found solutions through other types of regulations. The Romanian legal and institutional setting allowed a centralized top-down approach for the regional development process and brought forward the approach of the type â€Å"local development which falls among certain priorities of regional development established nationally†. Definitely, the local development is important for the regional development, but it is not self-sufficient in this respect. Therefore, the centralized approach should be completed by a decentralized approach, as a natural next phase.
Romania's integration in the European Union implies, apart the complex process of policy transfer, the learning of new modes to make policies characteristic to a multi-level governance and partnership culture. Of the different levels of governance of the European model, the regional level ("regional governance") most faithfully reflects, in our opinion, the complexity of reconfiguring the role of state in economy, at the beginning of this new millennium, in the European Union space and presents the highest practical importance for Romania, as a new Member State of the European Union, for, at the regional level, the structures are more flexible and the good practices are more rapidly assimilable. The selection of the best regional growth and development economic policies, the choosing of the objectives out of a series of competing options, the calibration in time and space of powers, roles, capabilities, and responsibilities and the encouragement of the win-win solutions call upon the choice and combination of some appropriate and efficient instruments. Representative for the new context, the regional growth and development policy must integrate, in Romania too, more knowledge, more creativity, new combinations of capabilities and new fields of expertise. This paper presents preliminary research results afferent to the post-doctoral research project: "Growth and regional development economic policies. Challenges for Romania in the context of economic-financial crisis and European model integration", carried out in the project "Economic scientific research, reliance of human welfare and development in European context", the Romanian Academy, "Costin C. Kiriţescu" National Institute for Economic Research, project financed for the 2010-2013 period from the European Social Fund (EFS) and implemented by the Romanian Academy, Costin C. Kiritescu National Institute for Economic Research, in the period of time 1 December 2010 - 30 November 2012, coordinator: Professor Dr. Valeriu Ioan Franc. The question we intend to answer, in the present phase of our research, based on the comparative analysis of the decentralisation systems of several Member States of European Union, respectively on the analysis of the regional disparities existing at the European Union level and of the effects of the economic integration, is- to what extent the capabilities of the regional policy should rather be concentrated in the hands of regional authorities or of the European Union than to be left individually to the Member States which should conceive their own regional policy? What we intend in this paper, based on the analysis of some experiences to decentralize the capabilities of economic policy at the European Union level, is to identify the regional implications of the interconnection of decentralization, centralization, respectively supra-nationalization tendencies and, implicitly, the analysis of the way to reconfigure the role of state in economy at the regional level, in the context of integration in the European model. The examination of the way to reconfigure the role of state in economy at regional level requires the review of the allocative, distributive, and regulating roles of the state from a regional perspective, the analysis, on one side, of the decentralization of economic policy capabilities from the national level to the regional level (for example, national level: pure public goods supply, for instance, national defence and the centralization of fiscal policy capabilities in order to achieve macroeconomic stability and revenue redistribution; regional level: mixed public goods supply, for instance, waste collection and community policy), on the other hand, the centralization/decentralization of regional capabilities at the European Union level.
This paper presents the significance of the issues related to the activity of territorial self-government for the social and economic development of Ukraine. The efficient operation of self-government in any country is unfeasible without financial resources. Polish experience in the development of territorial self-government is particularly valuable in relation to the reform of Ukraine’s self-government. The paper outlines the differences in the structure and operation of territorial self-government in both countries. The paper is concluded with numerous observations on the direction of selected reforms of Ukrainian self-government. It shows the weaknesses of local self-government in Ukraine, which result from the lack of decentralization of finance and the small amount of state-collected taxes. The conclusions end with the observation that a consistent development of the Ukrainian state is required for Poland to develop well.
The political transformation in Poland led to the decentralization of many activities from the state level to that of democratically elected governments at regional and local levels. Since 1999 each of the newly established regions has to formulate and implement policies in numerous fields, including culture and heritage. The cultural policies that they have pursued are influenced not only by structures inherited from socialist times, regional artistic traditions, perceived development needs and aspirations but also by the ability of particular regions to seize the opportunities provided by them (for example by the European Union funds) and by approaching culture as an important factor in economic and social development. Using the example of the Małopolska region, the author examines the regional cultural policy as evident in strategic documents, the financing of cultural institutions, programmes and projects on the regional level.
This paper presents the significance of the issues related to the activity of territorial self-government for the social and economic development of Ukraine. The efficient operation of self-government in any country is unfeasible without financial resources. Polish experience in the development of territorial self-government is particularly valuable in relation to the reform of Ukraine’s self-government. The paper outlines the differences in the structure and operation of territorial self-government in both countries. The paper is concluded with numerous observations on the direction of selected reforms of Ukrainian self-government. It shows the weaknesses of local self-government in Ukraine, which result from the lack of decentralization of finance and the small amount of state-collected taxes. The conclusions end with the observation that a consistent development of the Ukrainian state is required for Poland to develop well.
Decentralization of decision-making on the availability of essential public goods for regional and local level raises questions regardless of ability to ensure or guarantee the supply by the small municipalities. It affects the delicate problem of fiscal decentralization and own limits of decentralization process. In this paper, we deal with problems concerning primarily the development of small municipalities as independent public corporations, their ability to play the self-government role and to ensure the availability of essential public goods and services. The main criteria for defining small rural communities are the population and the status of municipality in the settlement structure, which is a predetermined by range of services provided at territory of municipality (market services, public services) to its citizens and residents of surrounding villages. We deal with problems of financing small communities, their participation in the distribution of revenue from shared taxes, the availability of other resources. We monitor the factors that enter into models of reallocation of public resources. We base their findings mot only on information from literature, but also from terrain research, which not only confirmed some previously published facts, but allowed to reveal the factors that significantly affect the financial situation of small municipalities. This led to the determination of parameters, the key mechanism for setting the allocation of public resources. On the basis of the investigation, we analyze the parameters, the key mechanism for setting the allocation of public resources. In conclusion, the authors summarize the main issues and articulate the principles that should be respected in the formulation and adjustment of the budget determination.
Open access
Regional Development and Policy
Polish socio-economic development
Hungarian Social, Economic and Educational Studies
This book explores the system of financing local governments in selected countries of Central and Eastern Europe. Using evidence from the last two decades, the authors, experts on their particular countries, describe the development of the current local government finance system in each nation, and the major challenges and policy options they face. The contributions in this book provide comprehensive coverage of a transitional Europe that encompasses both modern local public finance theory and specific applications in the target countries.
Describing the process of public sector decentralization is a aim of the article. Increasing the responsibility and competence of local government units is aimed at a taken of decentralization process of the sector of the public finance. Thanks to granted competence, the local authority together with the community take decisions concerning the path of the development of given local government unit. In the article tasks and competence of government units on different level were discussed. Also critically, issues connected with financial resources of local government units and the connection of these resources with the expenses side were presented.
Viktória Vásáry, Andrea Elekes, Péter Halmai, Vasary, Viktoria · 6 authors
Can we agree fully with the statement, that “agricultural spending is a major distorting factor in the EU economy and a distinct obstacle to the Lisbon agenda’s implementation”? (Gros, 2008) Is it without question that Europe’s agriculture is in position to become sustainable and competitive without certain kind of common policy with no Community financing? Is it unambiguous in every respect, that the challenges facing the sector – globalization, trade liberalization, climate change, water management, Lisbon process, enlargement, changing preferences – could be answered at national level utilizing exclusively national financial sources? The answers to these questions are complex. So the purpose of the paper is multiple: - Exploration of factors justifying community level intervention. – Could be applied the bottom line of the “decentralization theorem” to budgetary questions and needs of the agricultural policy? According to our hypothesis the answer is considered yes. - Assessing present CAP - taking into account its ability to provide EU wide public goods (multifunctional elements serve in deed significant cross-border externalities) and to create EU value added. - Making an attempt to redefine EU’s agricultural policy through exploring objectives having a greater impact by being implemented at the supranational level and not at other secondary decision levels. – Making an attempt to outline a Common Rural Policy, a policy promoting the provision of public goods required by the society by means of targeted and decoupled economic policy measures. In order to attain the objectives of the paper we apply the theory of fiscal federalism, make analysis on EU public finances in a broader context.
Economic and social cohesion between the EU Member States is one of the explicitly stated goals in the Treaty on European Union. The EU's Structural Funds as a part of the Union's regional policies are a mechanism of conditional grants that provides co-financing for growth enhancing investments. Evidence on the effectiveness of the Structural Funds is mixed. While Boldrin and Canova (2001) find no sign of a catch-up effect of regions receiving aid for the period of 1980-1996, Beugelsdijk and Eijffinger (2005) find a positive relationship between (lagged) Structural Funds expenditure and GDP growth at the national level covering 1995-2001. De La Fuente (2002) points to the fact that the inclusion of conditioning variables might also play a crucial role for the results. Ederveen, deGroot and Nahuis (2002) find that Structural Funds themselves have a negative impact on growth. However, the impact turns out to be significantly positive, when interacting variables measuring institutional quality are taken into account. Similarly, Esposti (2005) shows that additional policy measures (spending on CAP) can have significant counter-effects on the effectiveness of Structural Funds expenditure. So far the federal structure of the EU Member States did not attract much attention when the effectiveness of the Structural Funds is considered. Although the EU Commission requires the inclusion of regional authorities and stakeholders in the planning and implementation procedure of programs funded by Structural Funds, one should expect that the performance is better, where the sub-national authorities are more accustomed to pursuing economic policy and implementing programs. This should be the case in states with a higher degree of sub-national autonomy. Using panel-data for a sample of 13 EU Member States from 1960-1995 the effects of Structural Funds on growth are analysed. Then a decentralization index by Stegarescu (2004) is introduced as an interacting variable in order to measure the degree of sub-national autonomy. This paper shows that increasing sub-national autonomy has a significantly positive impact on the effectiveness of the Union's Structural Funds expenditure.
In recent years, the problem of reforming governmental systems has been a major issue facing Poland. This paper outlines the challenges of reforming Poland's public finance system, concentrating on the financial aspects of reform. Due to the constraints of public funding and efforts to diminish the total tax burden, reform is difficult. Yet, change in the redistribution of public revenues is absolutely essential for Polish society. We sketch the existing situation in Polish public finance and concentrate on the limitations and possible directions of the reforms. One crucial aspect of the forthcoming reforms will be a change in the revenue that local government derives from central government taxation. Reformers expect to involve local governments in the process of taxation through a new local tax and allow them to establish tax policy on both local and regional levels.
The author explains mechanism of local economy functioning and distinguishes three sets in this mechanism: decentralized, centralized and mixed sets. Taking into account conditions of local economy functioning, in which local authorities are decisive subjects (local administration and people's councils) the author formulates an opinion that postulates on decentralization, which are stated in discussions, practically refer to substitution of centralized set with mixed set — and not decentralized one — of local economy. Centralized set can not be fully abolished even when mixed set is a predominating set of local economy functioning. Anyway it does not eliminate the possibility of competence expansion of leading local authorities. In such situation decentralized set of local economy functioning, in strict meaning of the word, can play a marginal role only. The author considers in a broad way the role played by financial factor in local economy functioning. A special attention is paid to dissimilarity of financing principles in particular sets of this economy, because efficiency of the reform considerably depends on proper knowledge about these principles.
The principles of unity and complexity introduced into the Polish State budget in 1951 are no longer fully observed. In particular, certain funds administered by local councils have appeared gradually in the last years, on the basis of the budget law of 1958 which admitted making some budget expenses dependent on definite budget revenues. Moreover, some funds have been created outside the local budgets. These deserve special attention as a new phenomenon which becomes increasingly important for the local councils activities and especially for councils of the lowest level. The development of decentralized funds seems to be desirable firstly in the economic micro-regions, such as villages and towns, in order to accelerate their development. The augmentation of the role of decentralized funds would also be advisable in counties and provinces provided they constitute regions with specific economic structure. Decentralized funds should be first of all used to finance local investments, the more so that this would be in accordance with the main destination of the funds already administered by local councils. In this way, decentralized funds could in the future be transformed into the local investment budgets. The considerable development of decentralized funds in this country, in particular of those of the lowest level of local administration, seems, moreover, to prove that local budgets at this level, which since 1951 have been incorporated into the State budget, are not fully adequate for financing local councils activities. This suggests that a reform of local budgets of the lowest level is advisable, which would make their administration more similar to that of decentralized funds. The author considers in detail the perspectives and conditions of s'uch a reform of the local budgets of the lowest level, as well as the prospects and conditions of further development of the decentralized funds if no budget reform takes place. He discusses especially the links between decentralized funds and local budgets in this last case. The other subject of the author's consideration is the advisability of financing the local councils activities by bank credit or by credit granted by central funds administered by budget authorities