en pl
en pl

Central European Management Journal

Show issue
Year 2016 
Volume 24 
Issue 1

Public Debt and Its Impact on the Polish Economy and Society

Gavin Rae
Kozminski University

2016 24 (1) Central European Management Journal

DOI 10.7206/jmba.ce.2450-7814.165

Article contents

Abstract

Purpose: To analyse the issue of public debt in Poland and examine its effect on other areas of socio-economic life as well as government policy.
Approach: The question of public debt is placed in its historical context by looking at how it grew during the Communist system and influenced the transition period. The article draws on a range of secondary economic statistics and considers in detail a number of public policy issues, such as the reform of the pension system.

Findings: One result of the large debt incurred by the end of the 1970s was that Poland became indebted to creditors in the West. This dependency helped to shape its economic policy at the end of the 1980s. The transition to a market economy placed new burdens on the country’s public services, primarily due to the resulting large deactivation of labour. Furthermore, the creation of a compulsory private pension system at the end of the 1990s diverted significant funds out of the government’s budget and swelled the country’s public debt. Since the outbreak of the economic crisis, Poland has avoided a recession by increasing public investment by utilising available European Union funds. However, due to internal and external limits on the size of its public debt, the government is being pressured to reduce this spending. In order to create more fiscal room, the government has partly dismantled the compulsory private pension system as a short-term solution to the growing debt crisis.

Value: In the wake of the global financial crisis and economic turmoil in the European Union, the matter of public debt has taken on increased importance. This paper considers this question from a long-term perspective in a country that has been relatively successful during the international economic downturn. By examining public debt from this broad perspective, we can better understand the economic situation in Poland and the European Union, whilst also shedding light on some of the surrounding academic perspectives and public policy debates.

References

  1. BBC. (2009). Crisis Cost US $10,000 Each, http://tinyurl.com/kqdvm7 (04.03. 2013). [Google Scholar]
  2. Business.pl. (2014) Szczurek: po przekazaniu aktywów z OFE dług publiczny spadł o 9 proc. PKB, http://tinyurl.com/kxecjfq (11.12. 2014). [Google Scholar]
  3. Cain, J.G. and Surdej, A. (1999). Transitional Politics or Public Choice? Evaluating Stalled Pension reforms in Poland. In: M. Rueschemeyer, L. Cook and M. Orenstein, Left Parties and Social Policy in Postcommunist Europe. Colorado: Westview Press. [Google Scholar]
  4. Central Statistics Agency (2011). Ubóstwo w Polsce, 2011. Warsaw: Polish Statistics Agency. [Google Scholar]
  5. Central Statistical Agency (2012). Statistical Yearbook of the Republic of Poland. Warsaw: Central Statistical Agency. [Google Scholar]
  6. Chancellery of the Prime Minister. (2008) Polska 2030 (online) www.premier.gov.pl. Available from: http://tinyurl.com/d48ucn4 (04.07.2013). [Google Scholar]
  7. European Commission. (2013) Council Recommendation on Poland’s 2013 National Reform Programme, http://ec.europa.eu/. Available from: http://tinyurl.com/pay7tqa (13.02.2014). [Google Scholar]
  8. Eurostat (2013a). Newsrelease Euro indicators, http://tinyurl.com/mhwzsxr (12.07.2014). [Google Scholar]
  9. Eurostat (2013b). Newsrelease Euro indicators, http://tinyurl.com/cf4du66 (22.05.2014). [Google Scholar]
  10. Financial Times (2013). Why Government Debt Burdens Really Matter, http://tinyurl.com/nyagl5x (15.02.2014). [Google Scholar]
  11. Galbraith, J.K., Randall Wray, L., Mosler, W. (2009). The Case Against Intergenerational Accounting. Public Policy Brief, The Levy Economics Institute of Bard College, 98. [Google Scholar]
  12. Gazeta Wyborcza. (2012a) Tylko 1000 zł na dziecko: becikowe zostaje po staremu, http://tinyurl.com/l8j5zul (19.10.2013). [Google Scholar]
  13. Gazeta Wyborcza. (2012b) Człowiek jest zbędny, gdy nie może kupować, http://tinyurl.com/myut7qp (17.08.2013). [Google Scholar]
  14. Hendron, T., Ash, M. and Pollin, R. (2013). Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff. Cambridge Journal of Economics, 23(1), http://dx.doi.org/10.1093/cje/bet075 [Google Scholar]
  15. Kalecki, M. (2010) Michal Kalecki, "Political Aspects of Full Employment", http://tinyurl.com/cp9ood2 (04.01. 2013). [Google Scholar]
  16. Kobayashi, K. (2013). A Theory of Public Debt Overhang, http://tinyurl.com/ojf4lk5 (17.11.2013). [Google Scholar]
  17. Krugman, P. (2014). Being Bad Europeans, http://tinyurl.com/mfbzaqx (01.12.2014). [Google Scholar]
  18. Money.pl. (2013). Likwidacja szkół. Aż 727 placówek na liście, http://tinyurl.com/qj8z7m8, (12.03.2014). [Google Scholar]
  19. Nowy Obywatel. (2012) Pomoc będzie… Nieskuteczna, http://tinyurl.com/kcxuvn6 (19.10.2013), [Google Scholar]
  20. Obserwator finansowy (2013). Local governments will have hard time passing budgets, http://tinyurl.com/llfb9vx (13.02.2014). [Google Scholar]
  21. OECD (2013). Total expenditure on health, http://tinyurl.com/n328soz (06.06. 2014). [Google Scholar]
  22. Oreziak, L. (2013). OFE i inne plagi polskie, http://tinyurl.com/lxymzex (23.10.2013). [Google Scholar]
  23. Polish Ministry of Finance (2013). Informacja kwartalna o sytuacji makroekonomicznej i stanie finansów publicznych w II kwartale 2013. Warsaw: Polish Ministry of Finance. [Google Scholar]
  24. Polish Social Watch (2010). Poverty and Social Exclusion in Poland. Warsaw: Polish Social Watch. [Google Scholar]
  25. Polish Statistics Agency (2012). Statistical Handbook of the Republic of Poland. Warsaw: Polish Statistics Agency. [Google Scholar]
  26. Przegląd (2011). W rentowej pułapce, http://tinyurl.com/knqbmy5 (12.09.2012). [Google Scholar]
  27. Puls Biznesu (2013). Ekonomiści: rząd dopuszcza wysoki deficyt budżetu, http://tinyurl.com/mxzxudp (20.07.2013). [Google Scholar]
  28. Rae, G. (2011). Poland’s Stalled Pension Reform. How Reform of the Private Pension System has Shaped Public Policy Debate. Paper delivered at ESPANET conference. Valencia 8–11 September 2011. [Google Scholar]
  29. Reinhart, C, Reinhart, V and Rogoff, K. (2012). Public Debt Overhangs: Advanced Economy Episodes Since 1800. Journal of Economic Perspectives, 26(3): 1399–1436, http://dx.doi.org/10.1257/jep.26.3.69 [Google Scholar]
  30. Rzeczpospolita (2012). Polska wieś bogaci się dzięki dotacjom z Unii Europejskiej, http://tinyurl.com/l9xhnnt (26.05.2014). [Google Scholar]
  31. Rzeczpospolita (2013). Ekonomiści: rząd dopuszcza wysoki deficyt budżetu, http://tinyurl.com/ptrkx25 (03.03.2014). [Google Scholar]
  32. Sfakianakis, J. (2012). History Shows Why Germany Should Help Greece, http://tinyurl.com/n3x8qlp (18.04.2013). [Google Scholar]
  33. Slay, B. (2000). The Polish Economic Transition: Outcome and Lessons. Communist and Post-Communist Studies, 33: 49–70, http://dx.doi.org/10.1016/S0967-067X(99)00025-2 [Google Scholar]
  34. Szelewa, D. and Polakowski, P. (2008). Changing Patterns of Childcare in Central and Eastern Europe. Journal of European Social Policy, 18(2): 115-131, http://dx.doi.org/10.1177/0958928707087589 [Google Scholar]
  35. Szumlewicz, P. (2011). Reformy podatków sprzyjają najbogatszym. In: Podatki. Przewodnik Krytyki Politycznej. Warsaw: Krytyka Polityczna. [Google Scholar]
  36. Szumlewicz, P. (2013). Pytania o reformę emerytalną, http://tinyurl.com/pjb9xpj (22.04.2014). [Google Scholar]
  37. TMS Brokers. (2013). Deficyt strukturalny w 2014 r. ok. 2 proc. PKB – Rostowski, http://tinyurl.com/ppgs9ra (13.01.2014). [Google Scholar]
  38. Williams, J. and Rhodes, A. (2011). A critical assessment of generational accounting and its contribution to the generational equity debate. International Journal of Ageing and Later Life, 6(1): 33–57. [Google Scholar]
  39. World Bank (1994). Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth, http://tinyurl.com/mwkrkgh (21.07.2012). [Google Scholar]
  40. Zalega, D. (2012).‘Skąd się bierze polski dług publiczny?’ Le Monde Diplomatique 9Polish edition), 6(64). [Google Scholar]
  41. Zawadzki, E and Ciura, G. (1997) Sytuacja rodzin (gospodarstw domowych) emerytów i rencistów w latach 1989–1995. Warszawa: Kancelaria Sejmu/Biuro Studiów i Ekspertyz. [Google Scholar]

Full metadata record

Cite this record

APA style

Rae, Gavin (2016). Rae, G. . (2016). Public Debt and Its Impact on the Polish Economy and Society. Central European Management Journal, 24(1), 89-112. https://doi.org/10.7206/jmba.ce.2450-7814.165 (Original work published 2016)

MLA style

Rae, Gavin. Rae, G. . “Public Debt And Its Impact On The Polish Economy And Society”. 2016. Central European Management Journal, vol. 24, no. 1, 2016, pp. 89-112.

Chicago style

Rae, Gavin. Rae, Gavin . “Public Debt And Its Impact On The Polish Economy And Society”. Central European Management Journal, Central European Management Journal, 24, no. 1 (2016): 89-112. doi:10.7206/jmba.ce.2450-7814.165.

People also read: