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Fiscal federalism versus rural development


  • Kulawik, Jacek


Rural development is usually equated with local development, i.e. comprehensive, long-term and multifariously conditioned evolutionary process of positive and desired quantitative and qualitative changes that are cumulatively manifested in better efficiency and productivity of economic operators and institutions and usability obtained by households. This process can be politically explained, modelled and controlled by reference to the traditional paradigm, the new rural development paradigm and recently also to the concept of cohesion policy in rural areas (Kierunki przeobrażeń..., 2015). It is difficult to find basic fiscal concepts and categories among the economic, social, environmental, political, institutional and cultural determinants. Whereas, for instance, taxes and other public levies, subsidies and grant-in-aid have a very strong effect on the financial potential of legal persons representing areas (e.g. gminas), production and cost functions, and development possibilities of companies and prosperity and life quality of rural residents. In this context, the basic aim of the paper is filling in the cognitive gap and extension of the political toolkit for controlling rural development. This was done by referring to the concept of fiscal federalism, approximating, e.g. the arguments for fiscal decentralisation and centralisation, mechanisms and effects of fiscal and interregional externalities along with instruments of their internalisation, to finally tackle the problem of optimisation of the size of local communities.

Suggested Citation

  • Kulawik, Jacek, 2016. "Fiscal federalism versus rural development," Problems of Agricultural Economics 253699, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
  • Handle: RePEc:ags:iafepa:253699

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    References listed on IDEAS

    1. Hillman,Arye L., 2009. "Public Finance and Public Policy," Cambridge Books, Cambridge University Press, number 9780521494267, April.
    2. Gramlich, Edward M, 1969. "State and Local Governments and Their Budget Constraint," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(2), pages 163-182, June.
    3. Hillman,Arye L., 2009. "Public Finance and Public Policy," Cambridge Books, Cambridge University Press, number 9780521738057, April.
    4. Robert P. Inman, 2008. "The Flypaper Effect," NBER Working Papers 14579, National Bureau of Economic Research, Inc.
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