This paper analyzes residential water demand in Poland and the determinants thereof, including both water tariffs and income levels. Information on the price and income elasticities of residential water demand is crucial for effective management of water demand. We carried out this empirical analysis using several panel-data models. The analysis is based on data provided by the urban municipalities, in which the number of the end-users connected to water supply networks exceeded 50,000. We focused on the larger cities to obtain sample homogeneity in terms of the access to water supply and sewage collection systems, as well as the income structure. We found that the indicators of price elasticity of residential water demand in Poland are similar to those being known from the relevant surveys conducted in Western Europe. However, the income elasticity is smaller in absolute terms when compared to that in countries with more developed economies. Based on the results obtained, our prediction is that the decreasing trend of individual water consumption in Poland will slow down in the next few years. Our study is one of the first to investigate the price and income elasticities of water demand in Poland, and also one of the first such ones carried out for economies in transition.
The aim of this paper is to define expenditure and revenue decentralization indicators for Polish municipalities and to analyze if and how the limits of spending and revenue autonomy influence local government spending behaviors. The expenditure decentralization is difficult to measure, that is why the analysis of the effects of limits on spending autonomy are less common in the literature than those which relate to the revenue autonomy. In this paper, I propose indicators of revenue but also expenditure decentralization for Polish municipalities. Using statistical analysis and econometric panel analysis for rural municipalities in years 2000-2014 I study if and how these indicators explain local spending policy. I focus on spending for culture using median voter demand framework. Expenditure for culture is a small part of local budgets, but vital from the social point of view. Municipalities in Poland are important creators of local cultural life, which is especially important in less developed or peripheral regions, where citizens do not have access to private cultural institutions. I present that limits in local governments spending and revenue autonomy influences the local spending behaviors. I found that those limits caused not necessarily effective cost minimizing and create the important problem of horizontal equity. At the same time in less autonomous municipalities spending are less related to citizens demand-so there are problems to attend allocative efficiency. My study presents that the problem of the effects of incomplete expenditure decentralization is very important but poorly recognized in the literature.
The aim of this paper is to analyze how limits in revenue and spending autonomy of sub-sovereign governments influence their decisions. Revenue and spending autonomy indicators for Polish towns were established and used in analysis on school education expenditures during 2003–2016. The influence of limits on revenue autonomy on municipal spending has been extensively addressed in both theoretical and empirical literature. However, studies related to spending autonomy are rare. The analysis presented in this paper suggests that when limits exist in spending autonomy, more decentralized tasks are crowded out by regulated obligations. That is why the spending autonomy analysis is important to evaluate the equity between local units and the adequacy of local revenues to decentralized expenditures.The basic principle of local finance is that there should be an adequate relationship between the financial resources available to a local authority and the tasks it performs. However, in practice, the assessment of whether this has been achieved is very difficult. Often, only problems with the solvency of local governments indicate that we are dealing with a poorly constructed system of local finances. The expenditure autonomy indicator proposed in this article is a tool that provides a way to indicate problems with the adequacy of revenues before such anextreme situation occurs.
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