Education Financing: Explaining the Expenditure Concentration Gap between the State and Local Governments in Poland 2008-2019

Abstract

Purpose: The aim of this article is to explain the differences between the educational expenses of municipalities and cities in Poland and the educational subvention received by them from the state budget, in particular the scale of the violation of the actual educational expenses of municipalities and cities by their original structure as a result of aggregated decisions of local authorities. Design/Methodology/Approach: The concentration degree of educational expenditure and subvention streams using the Herfindahl-Hirschman Index (HHI), for 2008-2019 from the database of the Local Data Bank of the Central Statistical Office has been used. Findings: The educational subvention was universal (nationwide), which is evidenced by the low degree of its concentration for all the studied groups of entities, the highest HHI values for educational expenses were recorded in the cities with county rights in terms of expenses on subsidies, property expenses, expenses on materials and services, as well as total expenses, and the higher degree of concentration of these expenditures as measured by the HHI results from uncoordinated financial decisions of the cities authorities concerning expenditures on education, disturbing the universal character of the nationwide educational subvention in aggregate were observed. Recommendations: There is a need for systemic actions of central and local authorities to reduce the level of imbalance in financing education by local governments. Practical Implications: for the empirical identification of determinants of the educational expenditure and subvention level of municipalities as a starting point for a discussion on the actual scale of financial responsibility for education in Poland. Originality/Value: To estimate the concentration gap between educational expenditure and subvention for groups of entities under study, local governments, municipalities and cities.