GeoJournal 50: 225–234, 2000. © 2001 Kluwer Academic Publishers. Printed in the Netherlands.
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Local government, local economic development and quality of life in Poland Craig Young1 & Sylwia Kaczmarek2 1 Department of
Environmental & Geographical Sciences, Manchester Metropolitan University, John Dalton Building, Chester Street, Manchester M1 5GD U.K. (e-mail:
[email protected]) 2 Department of Urban Geography & Tourism, University of Lodz, Kopcinskiego 33, 90-142 Lodz, Poland Received 16 June 2000; accepted 3 August 2000
Key words: decentralisation, economic development, foreign direct investment, governance, institutional thickness, local economic development, local government, quality of life, tourism
Abstract The establishment of local self-government was a key part of the post-1989 transformation in East and Central Europe. Local government in both Western and East and Central Europe has increasingly been expected to play a role in local economic development (LED). Local government is one important agent in the complex processes of building ‘institutional thickness’ to ensure the development of local economies and the quality of life of inhabitants. This paper presents the results of a national postal questionnaire survey of the LED role of the lowest level of local self-government in Poland, the gmina or commune. The paper establishes a baseline of knowledge regarding: the local economic problems faced by communes; their attitudinal, strategic and organisational responses; and the main factors which are hindering the communes’ LED role.
Introduction The establishment of local self-government and territorial decentralisation are an integral part of post-1989 processes of transformation in East and Central Europe (ECE) (for an overview see Baldersheim and Illner, 1996). Political decentralisation was seen as essential for dismantling the communist past and creating a new political and economic order (Regulska, 1997a). It created local government bodies which had to increase their initiative in maintaining a level of service provision to local populations (Mitchneck, 1997). In addition to the provision of public services local governments were also envisaged as playing an important role in local economic development (LED) through the regulation of the wide range of factors which underpin the growth and development of local economies. Development became a local policy concern with implications for changing the spatial structure and the direction of growth of the economy. Thus reform aimed at providing local government with the legal and economic powers to support the development of their communities through the implementation of plans and strategies (Grochowski, 1997). While there is now a reasonable literature detailing the nature of local government reform in ECE (see, for example, Regulska, 1997a; Baldersheim and Illner, 1996; Cielecka and Gibson, 1995; Coulson, 1995), a relatively neglected area is the role of local government in LED in ECE countries (though see, for example, Hardy, 1998; Hardy and Rainnie, 1996; Young, 1997; Mitchneck, 1995, 1997; Hausner et al., 1997; Herrschel, 1997, 1998; Stenning, 1997). However, this is an important issue in understanding the nature of post-socialist transformations and how they are being mediated by spatial contingencies. As
local government constructs policies which reflect their own priorities they are both shaped by an already existing set of institutional resources, and in turn themselves shape (to a degree) geographical variation in development. Though the relationship between institutions and trajectories of development is a complex one, local government in ECE plays an important role in the mix of institutions underpinning variation in development paths. Thus the aim of this paper is to outline how Polish gmina (or communes), the lowest level of local government in Poland, are involved in LED. This is achieved by presenting the results of a national postal questionnaire survey of the LED role of communes. After discussing the context of local government reform and the role of local authorities in LED, the survey methodology is outlined and evaluated. The paper then presents the results of the survey which seek to establish a baseline of knowledge regarding the local economic problems faced by communes; their attitudinal, strategic and organisational responses; and the main factors which are hindering the communes’ LED role.
Local government reform and local economic development After decades of central planning, post-1989 political decentralisation processes in ECE aimed to solve many problems through establishing new centre-local relations, including increasing the responsiveness of government to the needs of localities (Regulska, 1997a). In Poland, the establishment of local self-government at the commune level was the primary outcome of decentralisation. The new local government was
226 designed to operate in a similar way to local authorities in Western democracies. In North America and Western Europe, economic change associated with changes in the global economy and the deregulation of markets, combined with political perspectives favouring neo-liberal solutions to economic challenges, have apparently empowered localities (e.g. Harvey, 1989; Bennett and Krebs, 1991). While the impact of this ‘new localism’ has been questioned (e.g. Moore, 1990; Lovering, 1995; Peck and Tickell, 1994), observers agree that local authorities now have to take a greater responsibility for responding to changed market conditions, and this is particularly true of the transforming economies of ECE (Mills and Young, 1986; Hall and Hubbard, 1996; Bennett and Krebs, 1991; Mitchneck, 1997; Stenning, 1997; Hausner et al., 1997). In Poland, the decentralisation and reform of the state has involved a two-stage process. Initially, local selfgovernment at the gmina or commune level was established in 1990. This did relatively little to reorganise the territorial structure. The central state lay above 49 voivodeships (regions or provinces) and 267 new districts (‘rejony’), while the lowest level of government (and the only elected local self- government) comprised some 3,300 gminas. Reform at the regional and county level was the subject of political debate in the early 1990s but for political reasons was not considered favourably in the mid-1990s because post-1993 governments in Poland lacked the political commitment to administrative decentralisation (Regulska, 1997b; Grochowski, 1997). From 1996, however, the establishment of county and regional level self-government was considered in depth and, after the passing of several Acts in 1998, was established from January 1999. The new structure comprises elected self-government at three scales: 16 new regions, 373 counties or ‘powiats’, and 2,489 communes (a non-elected state regional voivod has been retained, however, to carry out legal supervision of the activities of the three levels of self-government). The new voivodship (regional) self-governments are responsible for regional development policy programmes incorporating regional public services, sustainable development and economic development (competitiveness and innovativeness of regions, promotion and international economic relations). Powiats are responsible for separately defined public service tasks distinct from the gminas (an official description of the 1998-99 reforms ‘A New State for New Challenges’ can be read on the Information Service of the Chancellery of the Prime Minister of Poland webpages at http://www.kprm.gov.pl/admin/SITE/anew.htm). However, the gminas (communes) and their powers established by the 1990 Local Government Act remain. The gminas are the basic and most important level of public administration. The key outcome of the 1990 reform was a partial shift in power from centralised state to local self-government, and the development of local structures which cut across sectoral interests, adapting them to local contexts (Jensen and Plum, 1993). The aim was to enable local government to: develop the required infrastructure for the operation of local government; improve the quality of life and human resources of
localities; regulate privately owned businesses and facilities; and to support productive activities and private enterprise (Grochowski, 1997). To achieve this the 1990 Local Government Act gave communes the right to own property, collect certain taxes, manage their financial resources, and act within a legal framework on all matters concerning the development and management of the commune (Regulska, 1997b). Communes thus gained responsibility for spatial management and environmental issues, infrastructure (water, waste, electricity and heating), public transport, some roads, communal property, education, culture, social welfare and public order. In addition, the Act also gave communes autonomy in a range of areas which are particularly relevant in supporting LED. Thus communes can set up organisational bodies and companies, and sign agreements with other entities. The communes may also conduct economic activity going beyond their statutory functions if required by social needs. In the case of tasks exceeding the capacity of one commune inter-communal co-operation is also permitted. The 1999 reforms did not reduce the significance or powers of the gminas. Indeed, they now receive additional resources for some functions, and changes to the tax system have increased their financial independence. In addition, it is likely to take some time for the new regional powers to start having a significant impact, particularly on economic development. The legislative framework within which gminas operate may not be particularly well defined, but it does afford communes flexibility in tackling LED. Ideally, local government action should provide the right circumstances for investment, innovation, entrepreneurship and economic growth (this section draws on Bennett and Krebs, 1991). Government statutory functions can have wider economic benefits, either directly (through planning, infrastructural investment or training) or indirectly (providing efficient services which improve the climate for business and reduce costs for businesses). Local government has four main groups of policy instruments: fiscal policy (such as incentives and taxation), expenditure policy (e.g. reducing business costs by investing in services and infrastructure), debt policy (spreading the cost of development) and administrative policy (especially minimising the barriers to investment and wealth creation). For successful LED there must be minimal barriers and compliance costs for endogenous and inward investment through efficient service provision and facilitative action while balancing local social and environmental requirements. These policy instruments should be especially significant in the ECE context. Economic transformation in the region has been guided by neo-liberal principles of market and trade liberalisation, privatisation, internationalisation of economic activity and attracting foreign direct investment (FDI). Although their ability to influence these processes varies, local governments are seen as an important part of the institutional, regulatory and governing processes underpinning the path of transformation and internationalisation (Swain and Hardy, 1998). In particular, there is a need to create high levels of what is termed ‘institutional thickness’ (Amin and Thrift, 1994a; Pavlinek and Smith, 1998) or ‘capacity build-
227 ing’ (Bennett and Krebs, 1991). Thickness or capacity arises from the presence of institutions which are developing an economic awareness and strategy through collaborative and collective interactions between institutions sharing a common industrial purpose. Appropriate institutional thickness can ‘hold down the global’ (Amin and Thrift, 1994b) in local economies and enhance their economic competitiveness by ‘embedding’ international investment locally. The paper and its methodology The aim of this paper is to establish a baseline of knowledge about the role of local government in LED in Poland. There have been positive results associated with these first experiences of local self-government (Grochowski, 1997). However, there are limits to the role of local government in LED. Local authorities can lack sufficient resources to impact on the local economy, particularly where this requires intervention in private business (Moore, 1990), and can have relatively little impact on attempts to mediate global processes (Peck and Tickell, 1994), and can be subject to organisational and economic constraints (Moore 1990; Hausner et al., 1997). The nature of reform in Poland has added particular problems to these limitations. In reality, Poland remained a highly centralised country where pre-1999 administrative structures had not adapted to the changed political and economic system (Grochowski, 1997; Regulska, 1997b). At the time this survey was undertaken there was still a lack of a clear division of responsibilities and fiscal arrangements between central and local governments. Central government exercised strong control over the majority of functions which should be the concern of local government, and local authorities lacked a clear picture of their budgetary resources and the rules of inter-governmental financial transfer. Studies suggest that although regional and local level institutions do play an important part in regional development in Poland, there is evidence to indicate that current formal structures lack an appropriate institutional thickness to significantly affect development trajectories. Local government structures are often weakly developed, and in some cases are circumvented by foreign direct investment (Hardy, 1998), while some consider that overall local government can do little more than to define the required outcomes of LED (Grochowski, 1997). While it is not the purpose of this paper to evaluate the significance of local government in LED, these limitations must be borne in mind in the analysis of their role. In order to address the research aim a postal questionnaire was distributed to a c.12% sample of Polish commune authorities (392 in total). A random sample was drawn proportionately to the relative frequency of communes of different sizes and functions within each of the then existing forty nine regions of Poland. Four categories of communes were sampled: regional capitals (a total of 49, response rate 56%); urban communes with >10,000 population (total 71, response rate 52%), urban communes with
