Wpływ transferów międzyrządowych na finanse gmin w Polsce w latach 2007–2023

Purpose | The article aims to assess the direction and strength of the relationships between the corrective and equalisation mechanisms used in Poland in the form of general subsidies and conditional grants from the state budget and selected aspects of the financial management of local government units. Research method | The research method is based on the analysis of panel data covering boroughs and towns with county rights in Poland for the period 2007–2023. Three sets of models were used to verify the effects of “crowding out” (or supporting) own revenues, the “flypaper effect” and the impact of transfers on local government investment. Results | Transfers generally have a positive impact on investment activity, but their negative relationship with the local tax base is observed, especially in less developed municipalities with less financial independence. Transfers (mainly subsidies) lead to a disproportionate increase in local government expenditure (the so called “flypaper effect”). In the case of less financially independent municipalities, transfers are often an ad hoc instrument, which in the long run makes these units even more dependent on financial support from the state budget, rather than stimulating the growth of their tax base. Originality / value / implications / recommendations | The results may be important for practice, as understanding the direct and indirect effects of the granting of subsidies and grants and the adjustment mechanisms used by local governments is crucial for the proper design of the future structure of intergovernmental transfers.