Implications of the Polish 1999 administrative reform for regional socio-economic development

On 1 January 1999, four major reforms took effect in Poland in the areas of health, education, pensions and local administration. After 20 years, only in the last case does the original structural design remain essentially unchanged. In this paper, we examine the implications of this reform from the perspective of the distance of municipalities from their regional administrative capital. We show that despite fears of negative consequences for peripheral regions, the reform did not result in slower socio-economic development for those municipalities that found themselves further from the new administrative centres. We use a number of socio-economic indicators at municipal level and apply differences-in-differences methods comparing the outcomes before and after the reform between the municipalities for which the distance increased and those for which it did not. Municipalities are matched on pre-reform indicators using entropy balancing. Apart from small effects on net migration, we do not identify any significant negative effects of the 1999 administrative reform for the peripheral municipalities. In fact, results are positive in the case of municipal revenues and, while they are not precisely estimated in our preferred specification, they remain statistically significant in a number of robustness checks.