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The Significance of Selected Socio-economic Factors for the Achieving of Fiscal Sustainability of Local Government Units (LGUs) in Poland

The article attempts to assess the impact of selected economic and social factors on the fiscal sustainability of 241 urban municipalities in Poland in 2004-2016. The article uses the econometric modelling of panel data. The analysis revealed that most of the variables had a negative impact on local fiscal performance. The main reason for this is the low fiscal autonomy of Polish cities and the strong dependency on grants from the central budget, as well as the high share of unfunded mandates. This situation means that cities are particularly sensitive to the external environment, while at the same time are deprived of fiscal stabilisation instruments allowing them to counteract this problem. It can be an important obstacle to achieving sustainable economic development.