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ORIGINAL ARTICLE
LOCAL POLITICAL BUSINESS CYCLES AND ADMINISTRATION SPENDING IN POLISH LOCAL GOVERNMENTS
1
Szkoła Główna Handlowa w Warszawie, Kolegium Gospodarki Światowej
Online publication date: 2019-06-28
Economic and Regional Studies 2019;12(2):187-199
KEYWORDS
ABSTRACT
Subject and purpose of work: The purpose of this article is to verify the hypothesis of the occurrence
of political business cycles at the self-governmental level in Poland. Materials and methods: The article presents a quantitative analysis of expenditures on remuneration
in the administration of Polish self-governments at the county (district) level (in the period 2007–2018)
and at province (regional) level (in the period 1999–2018) with the use of Arellano-Bond and LSDVC
estimators. Results: The panel data analysis makes it possible to conclude that in Polish self-governments cyclical
fluctuations of expenditure on remuneration can be observed. The increase in salaries depends on the
power of the ruling coalition as well as unemployment and the output gap in a region. In the case of
provinces and counties, also the increase of investment expenditures significantly affects the increase
of salaries. Conclusions: The results of the estimation of models clearly point to the presence of cyclical distortions
in remuneration in public administration, which are caused by the upcoming elections.
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