The Evaluation of Impact of Municipalities' Fiscal Competitiveness on Economic Growth

Abstract

Abstract:The competition between municipalities is problematic due to a common misconception that rivalry is impossible because documents regulating finances are the same across all local self-governments. In contrast, scientific research shows that the livability of one municipality can differ to another because of differences in their social-economic benefits. This distinction is not conditioned by geographic location or other special features of the municipality but rather by the amount of funds assigned and allocated to social and public welfare. This article aims to reveal the factors pertaining to the municipalities' fiscal competitiveness that affect economic growth within the state. This has relevance as a reallocation of a municipality's expenditure could provide new possibilities towards increasing future revenue of the municipality. For reaching the aim is examined by evaluating the effect of municipalities' fiscal competitiveness on Lithuania's economic growth using the volume and structure of expenditure in its municipalities. Results show that the major channels determining the fiscal competitiveness of a region are human resources, the business sector, and the institutional environment, and that these differ among municipalities. JEL Classification Numbers: H75, H76, R50; DOI: http://dx.doi.org/10.12955/cbup.v5.958

Differences in the Environmental, Social and Economic Development of Polish–Lithuanian Trans-Border Regions

“…Parameters (indicators) describing regional development were selected based on a review of the literature (Žičkienė 2004;Borys 2005;Vitunskiene et al 2007;Heffner and Stanny 2007;Kompa 2009;Brodziński 2011;Bogdański 2012;Churski et al 2014;Pociute 2014;Krupickaite et al 2014;Streimikiene 2014;Ruplienė et al 2017). Indicators were selected for every subordinate criterion, and a total of 16 indicators were included in the analysis.…”