DPU Working Paper - No. 188

By Magdalena Leisten Johansson

The analysis of the association between national/supranational transfers and reductions of regional economic disparities is the main focus on this paper. The empirical test that lays the foundation of its reasoning consists of panel data from 16 regions in Poland over the period of nine years, 2006-2014. Simple correlation analysis is used to demonstrate how transfers affect the budget structure and development which in turn affects subnational government fiscal behaviour towards investment; a prerequisite for economic convergence.

Evidence is thereby found to argue that the intergovernmental transfers designed to converge economic and social disparities of Polish regions are currently not synchronized with regional and EU pro-development policies. By relating the evolution of economic disparities in Poland, explicitly to coherence of financial arrangements of subnational government, their investment behaviour and regional policies, the paper contributes to close a knowledge gap in the Polish policy debate.

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wp188.pdf

wp188.pdf