Financial Determinants of Development in the Process of Gmina Management in the Silesian Voivodeship in Poland

This chapter focuses on the financial determinants of the development of local government units. Under conditions of limited financial possibilities, public entities wishing to develop are faced with the necessity of rational and effective allocation of resources, which requires an efficient system of local financial management. The limited possibilities to use foreign capital to finance investment projects force local governments to generate an increasing operating surplus, which, together with property revenues, constitutes free funds that determine the degree of self-financing. Therefore, the main objective of the research is to assess the financial potential of development of gminas (gminas are principal units of territorial division in Poland) located in the Silesian Voivodeship, especially urban, rural and mixed urban-rural gminas. Against the background of theoretical aspects concerning financial determinants of the possibilities of development of local government units, the study evaluated financial liquidity, financial independence, level of debt and self-financing, investment activity and operational activity and total capability of gminas in the Silesian Voivodeship to develop. The research was conducted based on reports on the implementation of budgets, annual reports of the regional accounting chambers and the Ministry of Finance in a dynamic perspective in the years 2012–2017, which allowed to assess the direction and pace of changes in the analysed indicators. Furthermore, the ratios studied were related to the arithmetic mean for gminas in Poland in total, which made it possible to conduct the analysis using the comparative background.