Abstract
We provide an empirical study analysing the distribution of EU funds among 2478 Polish municipalities in the period 2007–2011. EU funds are found to be concentrated in smaller municipalities and economically weak sub-regions, and do not increase in the municipalities’ fiscal capacity. Our primary focus rests on the question whether regional governments follow their own political self-interest when allocating EU funds even though national parties only play a minor role in Polish local politics and thus the conventional logic of supporting aligned governments does not apply. Difference-in-difference estimations show that the answer is affirmative: Municipalities whose voters are aligned with the regional government receive more EU funds per capita than non-aligned municipalities. Furthermore, we find support for the swing-district hypothesis: EU funds per capita decrease in the vote-share differential between the two leading parties.
Acknowledgements
We thank Igor Asanov, Thushyanthan Baskaran, Christian Bergholz, Kai Gehring, Małgorzata M. Hybka, the participants of ZEW 2016 Public Finance Conference, as well as the editors of the special issue and two anonymous reviewers for their helpful comments. We also thank Mirosław Lech Bogdanowicz from National Electoral Commission who made election data available for us.
References
Arulampalam, W., S. Dasgupta, A. Dhillon, B. Dutta (2009), Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India. Journal of Development Economics 88 (1): 103–119.10.1016/j.jdeveco.2008.01.001Search in Google Scholar
Bähr, C. (2008), How Does Sub-National Autonomy Affect the Effectiveness of Structural Funds? Kyklos 61 (1): 3–18.10.1111/j.1467-6435.2008.00389.xSearch in Google Scholar
Baskaran, T., M. Lopes da Fonseca (2016), Electoral Competition and Endogenous Political Institutions: Quasi-Experimental Evidence from Germany. Journal of Economic Behavior & Organization 122: 43–61.10.1016/j.jebo.2015.11.012Search in Google Scholar
Bober, J., J. Hausner, H. Izdebski, W. Lachiewicz, S. Mazur, A. Nelicki, B. Nowotarski, W. Puzyna, K. Surówka, I. Zachariasz, M. Zawicki (2013), Narastające dysfunkcje, zasadnicze dylematy, konieczne działania. Raport o stanie samorządności terytorialnej w Polsce. Kraków, Małopolska Szkoła Administracji Publicznej.Search in Google Scholar
Bouvet, F., S. Dall’Erba (2010), European Regional Structural Funds: How Large Is the Influence of Politics on the Allocation Process? JCMS: Journal of Common Market Studies 48 (3): 501–528.10.1111/j.1468-5965.2010.02062.xSearch in Google Scholar
Bracco, E., B. Lockwood, F. Porcelli, M. Redoano (2015), Intergovernmental Grants as Signals and the Alignment Effect: Theory and Evidence. Journal of Public Economics 123: 78–91.10.1016/j.jpubeco.2014.11.007Search in Google Scholar
Chalmers, A.W. (2013), Regional Authority, Transnational Lobbying and the Allocation of Structural Funds in the European Union. JCMS: Journal of Common Market Studies 51 (5): 815–831.10.1111/jcms.12038Search in Google Scholar
Commission Decision of 31 October 2006 drawing up the list of regions and areas eligible for funding from the European Regional Development Fund under the cross-border and transnational strands of the European territorial cooperation objective for the period 2007 to 2013.Search in Google Scholar
Commission Decision of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the European territorial cooperation objective for the period 2007–2013.Search in Google Scholar
Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999.Search in Google Scholar
Czerwińska, M. (2009), Operational Programme – Development of Eastern Poland, 2007–2013. Development Opportunities of Lublin Voivodeship and the Instrument of Regional Convergence. Romanian Journal of Regional Science 3 (1): 110–119.Search in Google Scholar
Dexia (2011/2012). EU Subnational Governments. 2010 Key Figures. Available at: http://www.ccre.org/docs/Nuancier2011Web.EN.pdf (cited 01. 06. 2015, last downloaded 01.06.2015).Search in Google Scholar
Dixit, A., J. Londregan (1998), Fiscal Federalism and Redistributive Politics. Journal of Public Economics 68: 153–180.10.1016/S0047-2727(97)00097-2Search in Google Scholar
EEA Grants Portal. Available at: http://eeagrants.org (cited 25.09.2015, last downloaded 25.09.2015).Search in Google Scholar
European Commission (2007), Cohesion Policy 2007–13, Commentaries and Official Texts. Luxembourg, Office for Official Publications of the European Communities.Search in Google Scholar
European Parliament (2014), An Assessment of Multilevel Governance in Cohesion Policy 2007–2013. Policy Department B Structural and Cohesion Policies. (cited 09.11.2015)Search in Google Scholar
Fenge, R., W. Wrede (2007), EU Financing and Regional Policy: Vertical Fiscal Externalities When Capital Is Mobile. Finanzarchiv/Public Finance Analysis 63 (4): 457–476.10.1628/001522107X268970Search in Google Scholar
Gendźwiłł, A., T. Żółtak (2012), Bezpartyjność w powolnym odwrocie. Analiza rozpowszechnienia bezpartyjności w wyborach lokalnych w Polsce w latach 2002–2010. Studia Regionalne i Lokalne 1 (47): 102–121.Search in Google Scholar
Gorzelak, G. (1999), Regional Policies and Regional Capacity-Building in Poland. pp. 131–161 in: M. Brusis (ed.), Central and Eastern Europe on the Way to the European Union: Regional Policy-Making in Bulgaria, the Czech Republic, Estonia, Hungary, Poland and Slovakia. CAP Working Paper. Munich.Search in Google Scholar
Grosfeld, I., E. Zhuravskaya (2015), Cultural Vs. Economic Legacies of Empires: Evidence from the Partition of Poland. Journal of Comparative Economics 43 (1): 55–75.10.1016/j.jce.2014.11.004Search in Google Scholar
Heimpold, G. (2008), Growth versus Equalization? an Examination of Strategies for Regional Policy in the Czech Republic, Hungary and Poland after EU Accession. Jahrbücher Für Regionalwissenschaft 28: 1–29.10.1007/s10037-007-0019-2Search in Google Scholar
Heinemann, F., T. Hagen, P. Mohl, S. Osterloh, M.O. Sellenthin (2009), Die Zukunft der EU-Strukturpolitik. Baden-Baden, Nomos.10.5771/9783845221007Search in Google Scholar
Jastrzębska, M. (2012), Rola środków europejskich w finansowaniu rozwoju jednostek samorządu terytorialnego. pp. 80–99 in: W. Miemiec (ed.), Europejskie bezzwrotne źródła finansowania polityki regionalnej w Polsce. Aspekty prawnofinansowe. Wrocław, Oficyna Wydawnicza „UNIMEX”.Search in Google Scholar
Johansson, E. (2003), Intergovernmental Grants as a Tactical Instrument: Empirical Evidence from Swedish Municipalities. Journal of Public Economics 87 (5): 883–915.10.1016/S0047-2727(01)00148-7Search in Google Scholar
Kemmerling, A., T. Bodenstein (2006), Partisan Politics in Regional Redistribution: Do Parties Affect the Distrbution of EU Structural Funds across Regions? European Union Politics 7 (3): 373–392.10.1177/1465116506066264Search in Google Scholar
KSI SIMIK, Umowy o dofinansowanie według programów i form prawnych (29.02.2016). Available at: http://www.funduszeeuropejskie.2007-2013.gov.pl/AnalizyRaportyPodsumowania/Strony/KSI_raporty.aspx (cited 01.03.2016, last downloaded 01.03.2016).Search in Google Scholar
Lackowska-Madurowicz, M., P. Swianiewicz (2013), Structures, Procedures and Social Capital: The Implementation of EU Cohesion Policies by Subnational Governments in Poland. International Journal of Urban and Regional Research 37 (4): 1396–1418.10.1111/j.1468-2427.2011.01102.xSearch in Google Scholar
Lindbeck, A., J. Weibull (1987), Balanced Budget Redistribution as the Outcome of Political Competition. Public Choice 52: 273–297.10.1007/BF00116710Search in Google Scholar
Ministry of Agriculture and Rural Development (2007), Rural Development Programme 2007–2013. Warsaw, Ministry of Finance database.Search in Google Scholar
Ministry of Regional Development (2007), National Strategic Reference Framework 2007–2013. Warsaw. https://www.funduszeeuropejskie.2007-2013.gov.pl/WstepDoFunduszyEuropejskich/Documents/NSRO_an_20_07.pdf (cited 20.09.2015, last downloaded 20.09.2015).Search in Google Scholar
Ministry of Regional Development (2008), Guide to National Cohesion Strategy (National Strategic Reference Framework 2007–2013). General Information, Organizational Structure, Operational Programmes, Implementation System, Contacts. Warsaw.Search in Google Scholar
Muraközy, B., A. Telegdy (2016), Political Incentives and State Subsidy Allocation: Evidence from Hungarian Municipalities. European Economic Review 89: 324–344.10.1016/j.euroecorev.2016.07.003Search in Google Scholar
National Council of the Regional Chambers of Audit (2008–2014), Sprawozdanie z działalności regionalnych izb obrachunkowych i wykonania budżetu przez jednostki samorządu terytorialnego. Warsaw. http://www.rio.gov.pl/modules.php?op=modload&name=HTML&file=index&page=publ_sprawozdania (cited 06.05.2016, last downloaded 06.05.2016).Search in Google Scholar
Oates, W.E. (2005), Toward a Second-Generation Theory of Fiscal Federalism. International Tax and Public Finance 12 (4): 349–373.10.1007/s10797-005-1619-9Search in Google Scholar
OECD (2008), OECD Territorial Reviews. Poland, Paris, OECD Publishing.Search in Google Scholar
OECD (2010), Regional Development Policies in OECD Countries. Paris, OECD Publishing.Search in Google Scholar
Polish Central Statistical Office Geostatistics Portal.Search in Google Scholar
Polish Central Statistical Office Local Data Bank.Search in Google Scholar
Radzyner, A., H. Tödtling-Schonhofer, A. Frangenheim, C. Mendez, J. Bachtler, D. Charles, K. Granqvist (2014), An Assessment of Multilevel Governance in Cohesion Policy 2007–2013: Volume 1, Study (Vol. 1). Publications Office of the European Union.Search in Google Scholar
Solé-Ollé, A., P. Sorribas-Navarro (2008), The Effects of Partisan Alignment on the Allocation of Intergovernmental Transfers. Differences-In-Differences Estimates for Spain. Journal of Public Economics 92 (12): 2302–2319.10.1016/j.jpubeco.2007.06.014Search in Google Scholar
Swianiewicz, P. (2011), Wykorzystanie środków unijnych przez samorządy, Available at: http://www.wspolnota.org.pl/rankingi/wykorzystanie-srodkow-zagranicznych-przez-samorzady/2010/ (cited 17.11.2015, last downloaded 17.11.2015).Search in Google Scholar
Swianiewicz, P. (2013), Konkurencja o środki unijne w opiniach polityków i pracowników samorządowych. Studia Regionalne i Lokalne 2 (52): 5–31.Search in Google Scholar
Swianiewicz, P. (2014), An Empirical Typology of Local Government Systems in Eastern Europe. Local Government Studies 40 (2): 292–311.10.1080/03003930.2013.807807Search in Google Scholar
Swianiewicz, P., A. Mielczarek (2005), Parties and Political Culture in Central and Eastern European Local Governments. pp. 13–77 in: G. Soόs, V. Zentai (eds.), Faces of Local Democracy Comparative Papers from Central and Eastern Europe. Budapest, Local Government and Public Service Reform Initiative, Open Society Institute.Search in Google Scholar
Tarno, J.P. (2000), Pojęcie I Istota Samorządu Terytorialnego. pp. 11–27 in: K. Byjoch, J. Sulimierski, J.P. Tarno (eds.), Samorząd Terytorialny Po Reformie Ustrojowej Państwa. Warszawa, Wydawnictwa Prawnicze PWN.Search in Google Scholar
The Agency for Restructuring and Modernization of Agriculture. Available at: http://www.arimr.gov.pl/programy-2002-2013/prow-2007-2013/pieniadze-z-prow-2007-2013-zostaly-rozdysponowane.html (cited 10.03.2016, last downloaded 10.03.2016).Search in Google Scholar
The Law of 27 August 2009 on Public Finance, Journal of Laws No. 157, item 1241, with amendments.Search in Google Scholar
The Law of 5 June 1998 on County Self-government, Journal of Laws of 2001, No. 142, item 1592, with amendments.Search in Google Scholar
The Law of 8 March 1990 on Municipal Self-government, Journal of Laws of 2001, No. 142, item 159, with amendments.Search in Google Scholar
Veiga, L.G. (2012), Determinants of the Assignment of EU Funds to Portuguese Municipalities. Public Choice 153 (1–2): 215–233.10.1007/s11127-011-9786-ySearch in Google Scholar
A Descriptive statistics and correlation matrix
B Background data on Polish municipalities
Tasks of Polish municipalities
| 1) | Spatial order, real estate management, environmental protection, nature conservation, water management |
| 2) | Municipal roads, streets, bridges, squares and traffic organization |
| 3) | Water supply, sewerage, disposal and waste water treatment, maintenance of cleanliness, sanitary facilities and landfills, disposal of municipal waste, supply of electricity, heat and gas |
| 4) | Activities in the field of telecommunications |
| 5) | Local public transport |
| 6) | Health care |
| 7) | Social assistance, including welfare institutions |
| 8) | Support to families and foster care system |
| 9) | Municipal housing |
| 10) | Public education |
| 11) | Culture, including municipal libraries and other cultural institutions and the protection of monuments |
| 12) | Physical culture and tourism, including recreational areas and sports facilities |
| 13) | Marketplaces and market halls |
| 14) | Municipal greenery and shelterbelts |
| 15) | Municipal cemeteries |
| 16) | Public order and safety, fire and flood protection, including maintenance of flood storage |
| 17) | Maintenance of municipal buildings, public facilities and administrative buildings |
| 18) | Pro-family policy, including the provision of social, medical and legal assistance to pregnant women |
| 19) | Supporting and promoting the idea of self-government, including the creation of conditions for the operation and development of auxiliary units and implementation of programs to stimulate civic activity |
| 20) | Promotion of municipality |
| 21) | Co-operation with and activities in favor of non-governmental organizations |
C Regressions to test the common-trend assumption
The regressions below are run to test whether municipalities with regional-municipal-alignment (hereafter aligned) are subject to a significantly different trend than those without this alignment. Column (1) and (3) compare the trend for 2007–2009 for aligned municipalities that became non-aligned in 2010 or 2011 to the trend for municipalities that are always aligned. The interaction term between (always aligned) and trend is far from significant. Column (2) and (4) compare the trend for initially unaligned municipalities that become aligned later to the trend of municipalities that are never aligned. Again, the interaction between (never aligned) and trend is far from significant. Finally, column (5) and (6) provide a comparison in trend for municipalities that were always aligned to those that were never aligned. The interaction between (always aligned) and trend is not significant. Given the short period of time of only three periods, we use a linear trend (except for column (6)). The dependent variable is the same as in Tables 4 and 5. It is important to note that Table 4 provides estimates with municipality-specific time trends that provide additional support for the notion that the results reported in Table 4 are not jeopardized by the violation of the common-trend assumption.
| (1) | (2) | (3) | (4) | (5) | (6) | |
|---|---|---|---|---|---|---|
| YEARS | 2007–2009 | 2007–2009 | 2007–2009 | 2007–2009 | 2007–2011 | 2007–2011 |
| Trend (linear) | 0.822*** | 0.869*** | 0.686*** | 0.698*** | 0.696*** | 0.354*** |
| (0.129) | (0.132) | (0.0602) | (0.0601) | (0.0222) | (0.0506) | |
| Trend (squared) | 0.0813*** | |||||
| (0.0113) | ||||||
| Never aligned | −0.169 | −0.158 | ||||
| (0.422) | (0.134) | |||||
| Never aligned × Trend | −0.128 | |||||
| (0.131) | ||||||
| Always aligned | −0.0785 | 0.261*** | 0.249** | |||
| (0.195) | (0.101) | (0.0991) | ||||
| Always aligned ×Trend | −0.0338 | −0.0324 | −0.0442 | −0.0393 | ||
| (0.0639) | (0.0640) | (0.0321) | (0.0319) | |||
| Constant | 2.527*** | 2.337*** | 2.691*** | 2.614*** | 2.353*** | 2.559*** |
| (0.417) | (0.0488) | (0.181) | (0.0509) | (0.0675) | (0.0700) | |
| Municipal FE | No | Yes | No | Yes | No | No |
| Observations | 3,206 | 3,206 | 3,851 | 3,851 | 6,138 | 6,138 |
| R-squared | 0.401 | 0.401 | 0.391 | 0.391 | 0.393 | 0.400 |
| Number of code | 758 | 758 | 853 | 853 | 1,403 | 1,403 |
Robust standard errors in parentheses
p<0.01, **p<0.05, *p<0.1
Article note
This article is part of the special issue “Fiscal Equalization in Europe” published in the Journal of Economics and Statistics. Access to further articles of this special issue can be obtained at https://www.degruyter.com/view/j/jbnst.2017.237.issue-3/issue-files/jbnst.2017.237.issue-3.xml.
Code and Datasets
The author(s) published code and data associated with this article in the ZBW Journal Data Archive, a storage platform for datasets. See: https://doi.org/10.15456/jbnst.2017255.184029.
© 2017 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston
