Financial Autonomy of Local Government Units: Evidence from Polish Rural Municipalities

The main purpose of this paper is to assess the level of and differences in financial autonomy across Polish rural municipalities. The level of rural municipalities’ financial autonomy in 2008–2017 was benchmarked against that of other types of municipalities. Also, a multidimensional assessment of financial autonomy levels was performed for the municipalities considered, and the underlying socioeconomic conditions prevailing in 2017 were identified. As shown by this study, financial autonomy varies strongly across Polish rural municipalities. Nearly 60% of them are at medium low or low levels. As a consequence, their financial standing and capacity to fulfill their own tasks depend on allocations from the national budget. This poses a considerable problem for their ability to remain financially stable.