Assessing financial condition of municipalities using taxonomic methods
Assessing financial condition of municipalities using taxonomic methods

Author(s): Agnieszka Wojtasiak-Terech, Anita Makowska
Subject(s): Public Administration, Economic policy, Methodology and research technology
Published by: Masarykova univerzita nakladatelství
Keywords: municipalities financial condition; financial indicators; municipalities rating; taxonomic methods;
Summary/Abstract: The goal of this paper is to develop a concept of assessing and comparing financial condition of municipalities (communes) using taxonomic methods and implement this concept into communes of Lower Silesia region in Poland. To analyze financial condition of the municipalities authors proposed 14 financial indicators which fall into four categories: related to incomes (four indicators), related to expenditures (four indicators), related to current balance (two indicators) and related to debt (four indicators). Selection of indicators was based on the revision of the literature, guidelines for municipalities, conducted local and international researches and best practices discussing financial condition of local governments. These indicators were calculated for all Lower Silesia municipalities (169 communes) for the year 2015. In order to group similar municipalities, in terms of financial conditions, authors created rating scale.

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