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August 29, 2026SustainabilityOpen Access

Financial Sustainability of Local Government Units and Their Investment Capacity: A Comparative Analysis of Municipalities and Cities with County Rights in Poland

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Authors

JKJanina KotlińskaJohn Paul II Catholic University of LublinASAnna SpozJohn Paul II Catholic University of Lublin

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Implication

Panel study reveals operating surplus and debt service drive local government investment capacity, highlighting distinct fiscal dynamics between municipalities and cities.

Key Points

  • To examine how financial sustainability indicators—specifically operating surplus, debt-servicing costs, and revenue autonomy—affect the investment capacity of municipalities and cities with county rights.
  • Analyzed annual fiscal data from 2018 to 2024 for Polish municipalities and cities with county rights from the Local Data Bank of Statistics Poland.
  • Estimated the associations using various panel regression specifications alongside descriptive Pearson correlation analyses.
  • Operating surplus demonstrated a consistent positive association with local investment capacity, whereas higher debt-servicing costs significantly reduced it.
  • Cities with county rights exhibited greater investment capacity than standard municipalities, while revenue autonomy showed a negative association with investment capacity.

Cite This Study

Kotlińska et al. (2026) studied this question.

synapsesocial.com/papers/6a9299db8e5d7d1fc0c12195https://doi.org/10.3390/su18178786
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