**4. Results**

Figure 2 shows the Urban Sprawl Index in each of the analyzed communes, which is the implementation of the first stage of the research. As the aim of the first stage of the research is to identify communes with a high and low degree of spatial structure disorder, attention should be paid to the intervals P(i). Communes with a chaotic spatial structure are those for which P(i) < 0. All communes for which P(i) < 0 are in the range (0; –1), which means a moderate degree of spatial structure disorder. The study did not identify communes with a high degree of disorder (–1 < P(i) ≤ –2) and a very high degree of disorder (–2 < P(i) ≤ –3). However, most communes for which P(i)>0 are in the range (0; 1). These communes are characterized by a moderate degree of space compactness. Only one commune is characterized by a very compact spatial structure, for which P(i) = 2.13 and it is a rural commune of Wielka Wie´s.

**Figure 2.** Urban Sprawl Index in the analyzed communes based on the Perkal method P(i). Source: own study based on Lity ´nski [6].

In Poland, the spatial structure of endangered urban sprawl assessed by P(i), is in the range (–1; 1), with one exception. This means that the spatial structure of Polish communes is relatively similar in terms of morphological features of urban sprawl. The level of urban sprawl is not high, but it is also impossible to indicate that the spatial structure is compact. There are no communes in Poland with an absolutely high urban sprawl level. There is also no group of communes with a compact spatial structure. The only exception here is one commune whose spatial structure is very compact.

The second stage of research, which involves verification of H(1), was based on the canonical analysis. As part of the canonical analysis, four variants of the relationship between the suburban structure and transfers from the national budget were tested. Table 1 shows the results of testing four variants. The most satisfactory results are provided by V(4), for which the canonical correlation reaches the highest values of R(k) = 0.46. This means that rural communes with a high degree of spatial structure disorder (Pi < 0) have the greatest impact on transfers from the state budget.


**Table 1.** Canonical analysis between budget transfers and urban sprawl.

The further part of the canonical analysis refers only to V(4), because this variant provides the most favorable results for the verification of the adopted hypothesis. Table 2 presents the results of testing the significance of pairs of canonical variables based on the Barlett test. The assessment of the significance of pairs of canonical variables, based on the critical values of the significance level (p), indicates that at the significance level ( α) > 0.00 only the first pair of variables is significant. The remaining pairs of variables are so high (p) that the conclusion was abandoned.

**Table 2.** Barlett test for V(4).


Based on the results presented in Table 3, it can be indicated the greatest positive relationship between the SGS variable and D(iu). There is no statistically significant negative relationship in the study, i.e., indicating that a higher value of budget transfers is accompanied by a lower level of the morphological variable. Thus, the results of the canonical analysis do not indicate a negative impact of urban sprawl on the state budget.


**Table 3.** Canonical weights for V(4).

Therefore, the conclusions from the canonical analyzes carried out indicate that it cannot be said that the disorder of the spatial structure accompanying the urban sprawl phenomenon has a negative impact on the national budget. Thus, it has not been proven that national expenditure is related to negatively valued morphological features, e.g., lower building density. Based on the results of the research, it is not possible to confirm the hypothesis H(1) that urban sprawl adversely affects the financial situation of the national budget.

The third stage of the research, which assumed the verification of H(2), was based on the SMD method. As the hypothesis takes two territorial levels: local and national, two SMD analyzes were carried out. It was assumed that the assessed group are communes with the highest degree of spatial structure disorder, i.e., rural communes for which P(i) < 0. The assessed group in Table 4 is marked as ( α). For the assessment of the local impact, the control group is marked as (β1) and consists of rural communes for which P(i) ≥ 0. On the other hand, the control group at the national level is marked as (β2) and they are all communes in Poland.


**Table 4.** Approximation of GDP (per capita) in the assessed group and control groups, Polish currency (PLN).

Table 4 presents raw data on the approximation of GDP(per capita) for the assessed group and control groups. It points out the same <sup>T</sup>(α) and <sup>T</sup>(β1). This means that the economic growth was the same both in communes with high urban sprawl rates and in spatially compact communes. On the other hand, a lower <sup>T</sup>(β2) means that the national GDP(per capita) grows slower than in communes with urban sprawl.

In Table 4 lower values of *ϕ*(*α*), than *ϕ*(*β*1) and *ϕ*(*β*2) also draw attention. This means that in communes with high urban sprawl rates, the level of GDP (per capita) is lower than in communes with a more compact spatial structure or in the country. This level was assessed using the SMD method, the results of which are presented in Table 5 The SMD values in the range 0.2–0.5 are marked in gray, which means a moderate effect. The study did not identify a large or very large effect.

**Table 5.** Assessment of the impact of urban sprawl on local and national economic growth using the standardized mean difference (SMD) method.


*SMD*(*β1*), which assesses the impact of urban sprawl on the local economy, is moderately negative. This allows to conclude that the impact of urban sprawl on the local economy is negative. Moreover, changes in *SMD*(*β*1) in 2010–2019 show a stabilized negative trend, which means that urban sprawl communes are not catching up with communes with a more compact structure. Therefore, it can be concluded that urban sprawl slows down economic growth and economic development. This impact can be assessed as negative at a moderate level. It is possible to confirm the hypothesis that urban sprawl slows down local economic growth.

*SMD*(*β*2), which assesses the impact of urban sprawl on the national economy, is also moderately negative. The tendency of changes in *SMD*(*β*2) in 2010–2019 indicates a reduction of the negative impact, but the impact is still moderate. This reduction results from the higher <sup>T</sup>(α) than <sup>T</sup>(*β*2). Thus, the impact of urban sprawl on the national economy is not clearly negative. Even though *SMD*(*β*2) is negative at a moderate level, the trend of changes indicates a clear improvement. Therefore, the hypothesis about the impact of urban sprawl on the slowdown of the national economy cannot be clearly confirmed.

Two main conclusions can be drawn from the above results. The first is that urban sprawl adversely affects the local economy and its growth. The second, urban sprawl, does not adversely affect the national economy. It also has no negative impact on the national budget. These conclusions are essential for spatial policy. Sprawl does not harm the national economy and the national budget, but communes with a compact structure are important for the dynamization of economic development. The research results confirm that compact communes represent a higher economic level than the national level, and thus have a positive impact on the national economy. For the national economy, the cost of sprawl is the lack of utilization of the development potential of the suburban space. Therefore, spatial policy should not be guided by absolute limitation of urban sprawl, because it has no detrimental effect on the national economy. Policy should focus on guiding the sprawl. This direction should consist in stimulating the formation of suburban housing estates with a compact structure. In the light of research, spatially compact communes dynamize

economic development. Therefore, an important role should be played by instruments stimulating positive spatial phenomena, and not restrictive ones preventing sprawl. The formation of compact structures will contribute to the use of the growth potential not only for the economies of the communes themselves, but also for the country.

#### **5. Conclusions and Discussion**

The contribution of the research in the development of the current state of knowledge can be noticed in the methodical and theoretical dimension, according to the set hypothesis. The added value in the methodological layer is the measurement of the impact of urban sprawl on national budget, taking into account the morphological variables. It fills the gap in the current state of knowledge regarding the explanation of the mechanism of linking the spatial and budgetary structure. It is significant for the spatial economy and public finances. Determining this mechanism allows for the formulation of spatial and fiscal policies or the integration of spatial planning with socio-economic planning. The conducted research shows that from the macroeconomic point of view, urban sprawl is not a process generating direct costs. However, it is a process that slows down economic growth, and communes with a compact structure are important to accelerate the pace of economic growth. As the assessment of urban sprawl losses is not unequivocally negative, the spatial policy should not focus on the absolute reduction of urban sprawl, but on stimulating the formation of suburban housing estates with a compact structure. We must bear in mind that urban sprawl can have either a positive or negative impact on the space and its other users, which will be equated with benefit or costs. However, the determination of externalities and their size is extremely difficult due to the existing market failures and the impact of this market on the processes taking place in it. What is significant, however, is that the inducers of urban sprawl may not even realize that they are producers of externalities. On the other hand, the remaining entities operating in space experience the resulting external effects [79]. Therefore, according to Papandreou [80], spatial policy should take into account the behavior of entities causing urban sprawl. Taking this into account, on the basis of research results, should be based on the use of instruments stimulating positive spatial phenomena. This means that entities deciding to build should be encouraged to locate among the existing buildings, creating a compact spatial structure. However, restrictive instruments to prevent urban sprawl should not be used, as sprawl is not a macro-economic loss-making process.

The presented conclusion, in light of the literature, justifies the need to combine spatial policy of the national level with the local level. This combination is expressed not only in the coherence of spatial plans, the assumptions of which would focus development into compact spatial structures. It pertains primarily to equipping local governmen<sup>t</sup> by central authorities with operational instruments for implementing spatial plans. Stimulating compact development at the local level requires financial as well as organizational and legal resources. For the correct functioning of a coherent planning system, active participation of residents along with an efficient public administration system will be important. Here it will be necessary to implement a common, acceptable spatial policy resulting in efficiency resulting from the cooperation of space users. Policy creating conditions for the exploitation of the identified development potentials in suburban areas [81,82].

It seems that financial instruments can play a decisive role in stimulating the formation of compact spatial structures. In this group, attention should be paid to indirect instruments such as exemptions or tax breaks for new compact housing locations. Local self-government should receive compensation from the national budget for the reduction of revenues, which takes place through the application of such understood tax exemption or relief. Another, indirect financial instrument could be a public fund offering credit facilities for the implementation of compact housing investments. There are no such instruments in Poland.

On the other hand, among direct financial instruments, a higher level of subsidizing infrastructure investments is proposed, which would result in the emergence of compact development. In Poland, there are so-called earmarked subsidies, which are a transfer from the national budget to local budgets to secure infrastructure investments. The transfer limit is generally 80% of the cost. There is, therefore, a range of an additional 20% that could be allocated to suburban communes.

The use of stimulating financial instruments creates the risk of an externality, which may be increasing the range of urban sprawl [51]. This may be the case of the anticipatory approach of local authorities to shaping undeveloped suburban space, including equipping it with attractive technical infrastructure. In our perspective, however, the use of stimulating financial instruments should be reserved only for supplementing the development between existing buildings. The point is to transform the current disordered structure of space into a compact form. The creation of completely new suburban housing estates on greenfields should not be stimulated by the public sector, but rather be subject to appropriate planning and implementation control. Control and planning on greenfields should be strengthened with legal and organizational instruments, i.e., organizational standards and administrative decisions. Strengthening the regulatory function of spatial planning, especially through organizational standards, would allow for effective and sustainable land use (e.g., in terms of protection of areas particularly suitable for agricultural production); compliance with the principles of environmental and landscape protection; compliance with safety rules; use the dimensions of buildings in accordance with the urban and architectural requirements [51]. In the case of administrative decisions made at the lowest level of public administration, we see the importance of skills, knowledge and intuition. In agreemen<sup>t</sup> with Sleszy ´ ´ nski et al. [83] we believe that the spatial policy implemented at the commune level, despite the standardized organizational norms, will be able to produce individualized positive externalities of urban sprawl with appropriate use of administrative decisions.

Stimulating compact development encounters difficulties resulting from the acceptance of costs on the part of society, as indicated by Meade [84]. Then, these costs may, to a limited extent, constitute the basis for verification of the conducted spatial policy and the introduction of restrictive instruments. Hence, we agree with the finding of Baumol et al. [85], that it is necessary to evaluate the effectiveness of national intervention by comparing the potential benefits of reducing social costs with the generated effects for the national budget. Our conclusions about the lack of macroeconomic net costs of urban sprawl justify that, from the point of view of the country, one should be cautious about applying restrictive instruments. The absence of these losses for the economy as a whole means that the governmen<sup>t</sup> does not have strong arguments for restrictive treatment of urban sprawl in public policy, especially when social losses are accepted. Therefore, there is no justification, for example, to reduce budget transfers for infrastructure investments resulting in the dispersion of buildings. It is true that in Poland there is no such reduction in transfers; however, this example demonstrates the difficulty of creating a compact spatial structure. Since the central authorities does not have an economic interest in preventing urban sprawl, it will be even more difficult to stimulate compact spatial structure. Hence, more important is the appropriate design of the system of financial instruments to stimulate compact development.

The research results are an extension of the current state of knowledge on the macroeconomic impact of urban sprawl. However, like many original concepts, they may have some limitations, which sometimes makes it difficult to formulate universal conclusions for the international scale. Firstly, the impact of sprawl on the financial situation of the national's budget was based on subsidies for communes specific to Polish public finances. Both the types of subsidies and the mechanisms for granting them are strictly defined in Polish law. Therefore, the conclusions about the impact on the national budget are, first of all, adequate for Poland. These conclusions may be valid for countries where the system of transfers from the national budget to the communes' budgets distinguishes subsidies related to co-financing the costs of infrastructure investments due to specific geographic conditions. Second, the impact of urban sprawl on the growth rate of local and national economies was determined on the basis of regional capitals. These are the most important

cities in Poland, but there is still a remaining group of medium-sized and smaller cities in the hierarchy of the national settlement system. There is also urban sprawl around smaller towns. It should be noted that the aforementioned limitations also set the directions for future research. An extension of the presented conclusions could be the assessment of the impact of urban sprawl in the configuration of the urban system, e.g., monocentric vs. polycentric; regional vs. subregional cities. It is also possible to adopt a different impact on the national budget than through transfers, which would be a country-specific approach. It seems that due to the different legal structures of the system of income and expenditures from the national budget, it is difficult to build an internationally universal research model.

**Author Contributions:** Conceptualization, P.L. and A.H.; methodology, P.L.; software, P.L. and A.H.; validation, P.L. and A.H.; formal analysis, P.L.; investigation, P.L. and A.H.; resources, P.L. and A.H.; data curation, P.L.; Writing—Original draft preparation, P.L. and A.H.; literature review A.H.; Writing—Review and editing, P.L., and A.H.; visualization, A.H.; supervision, P.L. and A.H.; All authors have read and agreed to the published version of the manuscript.

**Funding:** This research was funded by the National Science Centre, Poland; gran<sup>t</sup> no. UMO-2016/23/D/HS4/02961, ("Financial Mechanisms in the Economy Resulting from the Phenomenon of Urban Sprawl") and Cracow University of Economics, Poland, POTENTIAL Program No.52/GGR/2020/POT. ("Cities, suburbs and peripheries in the theory and in the empirical studies").

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** Publicly available datasets were analyzed in this study. Fiscal data was obtained from Central Statistical Office in Poland https://bdl.stat.gov.pl/BDL/start; spatial data was obtained from the appendices in the book [6].

**Acknowledgments:** Not applicable.

**Conflicts of Interest:** The authors declare no conflict of interest.
