SPATIAL ASSOCIATIONS IN THE SPHERE OF LOCAL GOVERNMENT REVENUE INDEPENDENCE: THE CASE OF POLAND

Abstract

Background and Objective: The revenue independence of local governments is a key issue in the functioning of these units in the context of sustainable development. Simultaneously, various financial, economic, political, geographical and environmental factors are studied as potential determinants of this dimension of fiscal autonomy. However, there is a dearth of studies exploring spatial associations in this field. Thus, the purpose of the article is to identify types of spatial associations in the field of the revenue independence of local governments in Poland and the development of such associations over time.

Study Design/Materials and Methods: Spatial associations in the municipalities in Poland in the field of revenue independence are studied using Moran’s Index and local indicators of spatial autocorrelation (LISA). These measures were separately calculated for each year between 2019 and 2023 using the data provided by Statistics Poland for the population of all 2,477 local governments in Poland. In addition, types of spatial associations were presented on the LISA cluster map to show certain clustering of the units and spatial outliers.

Results: The paper proved that there are significant and time-stable spatial associations between municipalities in Poland in terms of the level of revenue independence. In the years 2019–2023, there was a tendency for the positive clustering of similar values. Hence, neighbouring local governments imitate one another’s fiscal policy to some extent. In many cases, the spatial associations stretched even within the borders of regions (voivodships), while revenues from PIT and CIT contributed to the creation of clusters of units with high financial independence around metropolitan areas.

Practical Implications: The research study reveals that there is a tendency towards clustering among local governments with low levels of revenue independence, mainly in eastern and south-eastern Poland. Thus, there is a need to adapt some policies and regulations to the specificity of these areas to improve independence and fiscal efficiency.

Conclusion and summary: There is a space to search for specific issues affecting spatial associations in terms of revenue independence, regarding economic, geographical and environmental conditions, to enhance the revenue independence of local governments in the context of sustainable development.