Jul 3, 2020·Scientific Bulletin of Ivano-Frankivsk National Technical University of Oil and Gas (Series Economics and Management in the Oil and Gas Industry)
Abstract. The article substantiates ways to improve the regional and local development management systemeffectiveness in the context of ensuring endogenously-oriented socio-economic development of Ukrainian regions. According to the set goal, the following methods of economic research are used: analysis and synthesis; abstract-logical-to form the purpose and objectives of the study; dialectical and system analysis to process theoretical and methodological provisions, generalize literature sources, and make conclusions. It is proved that the reform of the required regional development management system is the completion of local government reform and decentralization of power; the formation of a clear system of distribution of powers between bodies of different levels and their resource provision; the improved management of municipal infrastructure; empowerment of local governments in financing the cost of socio-economic development of regions; provision of institutional and resource coordination of the regional strategies and projects development. Attention is drawn to the fact that administrative decentralization, the transfer of powers for independent management of territories to local self-government bodies should be accompanied by budgetary decentralization. Budget decentralization helps to increase the financial potential of the territory, activate innovation and investment activities, stimulate entrepreneurial activity, which will eventually strengthen the economic potential and ensure high-quality economic growth. It is proved that the practical implementation of certain tasks will contribute to improving the regional and local development management system, ensure the upward dynamics of economic development of territories, turn regional differences into new opportunities for the state and its regions socio-economic development, which will create a basis for improving the quality of life, regardless of where people live.
Introduction. Decentralization is characterized by the transfer of a large amount of powers and budgetary resources to local governments. At the same time, the financial and organizational capacity of local self-government bodies and the enterprises created by them is increasing. Budget decentralization creates new opportunities for borrowing through the placement of local government bonds by city councils. A utility loan is one of the instruments of local governments. Municipal credit, as one of the main financial institutions in the local finance system, is important in the financial support of local needs
Recently, the issue of federalism has turned at the centre of the political debate in Italy. It is basically due to the growing demand of rich northern regions who in 2018 laid down the requests to exercise additional functions retaining a more significant part of revenues that the central government collects in their territories. Another reason for attention to this issue is that the long period of public finance consolidation in Italy (2011-15) put the implementation of fiscal federalism to a standstill. There is a growing demand to ascertain the measure to which this implementation has been biased o remained undone. This paper focuses on this second issue investigating to which extent the design of fiscal federalism reform has been applied to the Italian municipalities with a special focus on the equalization system. The paper first proposes a review on the evolution of public finance setting in Italy before the crisis (2008-09), considering the decentralization process in the 1990s and the Constitutional reform of 2001 followed by the enabling law 42 in 2009. Then it looks at the period of fiscal consolidation after the financial crisis in 2011 focusing on the burden of adjustment measures imposed to Italian municipalities. Finally, it tries to summarize the contradictions that the overlapping of two contrasting political agendas – the centralization of public finance under fiscal consolidation and the ongoing fiscal federalism reform – created for the equalization system of municipalities.
The Covid19-related emergency has changed our perspectives on individual and collective priorities. Two aspects in particular will probably stand out for their impact on the way societies will change and adapt to the transformation required (and induced) by this shock. The first is the need to rethink social, economic, political, and territorial planning in a way that allows a prompt, more efficient, decentralized – but also coordinated – response to exogenous shocks, that transcends current (State-centered) administrative and policy boundaries.The second issue is how to finance crucial local infrastructure that allow such local areas to effectively react to exogenous shocks and challenges. The paper explores the possible use ot the EMS for this purpose.
The process of reform and fiscal decentralization in the Republic of North Macedonia is already in the second decade of implementation, the legal deadline of which was 2007. However, local government units are still lagging behind in the realization of many of their functions and legal competencies, mainly as a result of lack of financial means, lack of knowledge or lack of capacities to access on alternative sources of funding. An important instrument of financing, especially for financing local and regional economic development are municipal bonds, which are considered the most used financial instruments for financing local and regional capital projects in almost all developed countries of the World, but still in Republic of North Macedonia, no municipality has used this funding source. It is reasonable and necessary that this practice to be developed also in North Macedonia that would result in the realization of strategic municipal projects and at the same time will have an impact on the development of the capital market.Therefore, the purpose of this paper is to analyze the factors, causes and barriers of non-application of municipal bonds in North Macedonia as a financing instrument by the municipalities. Also in this paper are analyzed and evaluated the opportunities and constraints, benefits and risks, criteria and budget constraints of municipal bonds as an additional or alternative source of financial resources for financing local and regional economic development.
The local government administrations in Romania have become more visible for taxpayers lately, once the decentralization process has developed. The interest in knowing how local government resources are used has increased, especially after diversifying and increasing funding sources. The present paper presents a detailed analysis of the public revenues and expenditures for the territorial administrative units in Romania. A number of local public finance problems are highlighted: the decrease of public investment, the budget imbalances, the increase of transfers from the state budget, etc., which have been worsened by some legislative changes in recent years.
By 2022, a change in the form of government from unitary to federal will likely happen in the Philippines, a nation of 104 million. Although decentralization is not new to the country owing to the passage of the Local Government Code of 1991, the transition will have major policy implications on the assignment of expenditure and revenue (taxation) responsibilities for government functions. This study focuses on the technical and vocational education and training (TVET), an important component of the Philippine Government’s national strategy for economic development and poverty alleviation. TVET governance in the Philippines is placed under the authority of the Technical Education and Skills Development Authority (TESDA), an agency attached to the national government which operates a network of over a hundred TVET training schools and institutes. With the impending shift to a federal system, TESDA needs to formulate a decentralization strategy, determining which sub-functions of TVET governance should be retained at the national level, devolved/transferred to subnational governments, and shared between the two levels government. This paper maintains that in addressing these policy issues, the Philippine Government should be guided by the principles of fiscal federalism and informed by existing TVET vi decentralization models in federal countries worldwide. This paper utilizes comparative institutional analysis, an analytical framework that examines existing institutional arrangements in some jurisdictions to inform policy formulation elsewhere. TVET governance in eight federal countries are analyzed by answering this question: Which sub-functions are assigned to what level of government? The sub-functions of the TVET system are: a) policy formulation and planning, b) standard-setting and regulatory, c) financing/contracting and d) provision of TVET services to clients. Based on the findings of the study, policy makers in the Philippines are enjoined to consider the following policy recommendations on decentralizing TVET under the proposed federal system: a. TVET policy formulation, planning, standard-setting and regulatory functions should be assigned solely to the national government so that TVET governance is harmonized across jurisdictions, and to be consistent with the national government’s equity goals; b. Financing/contracting for TVET can initially be assigned as a “shared function” between the national and subnational governments; however, in the long term, the subnational governments should develop their local revenue generation capacity and eventually be responsible for TVET financing/ contracting in their jurisdictions. Policy makers should also explore alternative models for TVET financing such as inclusion of TVET in the existing Special Education Fund (SEF) and establishing a TVET Training Fund; vii c. Provision of TVET training services can initially be a “shared function” between the two levels of government; however, as experiences of federal countries clearly show, the primary responsibility of providing TVET services to clients should rest with the subnational governments.
The objective of this paper is to examine whether the level of fiscal decentralization of a country is a relevant variable to explain public investment in innovation (measured as the share of research and development (R&D) spending in total government budget) and the intensity of basic research within the public R&D bundle. To assess the effects of decentralization, we present a theoretical model where a 'benevolent government' invests in R&D aiming at maximizing net income available in the country (central government) or in the respective region (subnational government), states compete to attract capital investment, and R&D results are subject to interregional knowledge spillovers. According to the model, decentralization leads to a lower share of basic research in government innovation spending. The impact on total R&D is ambiguous, although it tends to be negative. The conclusions of the model are tested through an empirical analysis using country aggregate data. Confirming the predictions of the model, we find evidence that expenditure decentralization leads to lower intensity of basic research within public R&D, and that both types of decentralization negatively affect the size of innovation spending. Our findings suggest that deepening fiscal decentralization should be considered along with measures to compensate for innovation spending decrease, and that the central government should play a greater role in financing or carrying out basic research.
The subject of the study is the full range of methods for ensuring financial independence for local budgets in a decentralized environment. The purpose of the study is to work out a strategy based on the systematic approach to ensure financial independence for local budgets in a decentralized environment. The study methodology includes methods of analysis and synthesis, statistical methods, such as graphic and tabular methods, and methods for comparing and generalization. The results of the study. A comparative analysis of the impact of decentralization on the local budgeting has been carried out using the example of the 2014-2016 budget of Irpin. Some recommendation has been drafted to improve the system of local budgeting including some ways of greater development of the empowerment and autonomy of local budgets. Non-typical for Ukrainian economy gender method of budget analysis has been considered resulting in additional analysis of local budgets and eliciting a fact of the existence of some problematic budget lines regarding a gender-based approach in budgeting and working out a number of recommendation to eliminate them. The sphere of application of results. Local budgeting in a decentralized environment. Local budgets. Conclusion. Budget decentralization being taken into consideration opens up the prospect of the development of local self-government in order to deal effectively with the administration of local affairs, and enhance the role of citizens in the sphere of decision-making and practical implementation of socio-economic programs for the region. Financial basis of local budgets must assist local self-government in an effective implementation of the development strategy for the region. An analysis of the revenue and expenditure sides of the budget of Irpin in 2014-2016 in the context of the budgeting and income distribution of local budget shows a considerable increase in the level of fiscal decentralization of the income section of the budget, direct dependence of local authorities on the central Government and partly on transfer payments and emphasizes the need to strengthen the self-sustainability of local budgets and cover the requirement of financially literate managers. It has been found that a balanced division of powers between the central Government and the regions and decentralization of public finances are needed to reform local budgets (including the budget of Irpin). The sources of tax revenues are considered to be distributed between central and local authorities according to proper discharge of their duties that should be a subject for legislation on local self-government. Besides it is essentially necessary to give the local authorities the right to establish local taxes and duties and their rates. The analysis of a gender-based budgeting clearly indicates the importance of objective approach to budgetary expenditure. An integrated analysis of all the spheres of financing needs is important for rational and efficient allocation of financial resources at the state and local levels.
Dana Országhová, Radomíra Hornyák Gregáňová, Viera Papcunová
Changes in the socio-economic conditions of countries initiate modifications in the management of its economic and social processes, which are also followed by conversions in the public administration. At the same time, they are also looking for the concepts of rational organization and effective management of the public administration. The public administration of the Slovak Republic is created by local self-government and regional selfgovernment. Municipalities represent the local self-government bodies. The effective conditions of the municipalities are creating the effective setting of its financing. Until 2004 the financing of municipalities was determined annually by the state budget act and for the municipalities distributed from the state budget a share of the tax of personal income, which consisted of three taxes: tax of personal income, tax of the corporation income and road tax. In 2005 the fiscal decentralization took place in Slovakia as a part of the consolidation of public finances, resulting in a new way of financing municipalities. The basis of the new financing system of municipalities was to determine the tax of personal income as a single share tax, in particular, because the dynamics of the income of this tax was expected to grow even in the medium term. The objective of the paper is to evaluate changes and trends in the financial management of municipalities based on selected fiscal indicators within the period 1993 -2015.
Stanese Ioana Tatiana, CĂRĂUȘ Mădălina, Ungureanu Mihai Aristotel
The article approaches important aspects regarding the regional development process in Romania in direct correlation with the European Union views and directives in this field. This paper argues that regionalization implies a new reorganization of Romania in view of a balanced development and to increase the absorption of European Funds, which \nconsequently engages regional development, the development of local communities and the decentralization of public administration. Furthermore, in this paper we present the \nconsistency issue concerning the request for territorial- \nadministrative development in Romania, as it originates from the strategic documents, namely the "National Plan of \nGovernance 2017-2020" and the "Action Plan for the Implementation of the Strategy for Strengthening the Public Administration 2014-2020", and we highlight a number of \nshortcomings of this process.
<strong>Abstract</strong><br> Many reforms have been undertaken in local governance after the collapse of the<br> totalitarian, centrist and bureaucratic regimes in Central and Eastern Europe. Albania<br> has demonstrated that decentralization is a major development tool. More than two<br> decades of decentralization activities have revealed that the decentralization process has<br> brought about changes in the operation of institutions and delivery of services, even<br> though this change has taken place gradually. Fiscal decentralization is one of the three<br> dimensions that characterize the decentralization process. Local finance issues are an<br> everyday topic in countries in transition and should be addressed by means of an approach<br> that favors consolidation of local autonomy. Local governments in Albania have lacked,<br> and continue to lack, the fiscal capacity to deliver on the promise of decentralization<br> to improve public services and to promote and nurture local economic development.<br> Decentralization can promote economic development and improve citizens’ welfare<br> and living standards when service delivery and the quality of the decisions over how<br> public resources are deployed are improved, but local governments remain hampered<br> by inadequate transfers from the central government and from restraints imposed on<br> various revenue-generating options. However, inadequate financial instruments,<br> especially those of intergovernmental transfers, have affected regional disparities. In this<br> paper, through comparative analysis, analyzing a part of the Region (Qark) of Lezha’s<br> LGUs, economic development indicators, will approve the need for reform of these LGUs’<br> financial instruments in order to narrow the gap of regional disparities in Albania.
Local government and decentralization are the main challenges of the Albanian government reforms. Decentralization and urbanization are a greater pressure on local governments to finance public services and facilitate economic development. During the years, the local government responsibilities have been increased, while fiscal decentralization and transfer of funds have not progressed with the same speed, resulting in significant lack of funding. Local government budgets are generally small and cannot afford financing for major projects and infrastructure improvements. Funds from the state budget for infrastructure investments (mainly competitive grants/Regional Development Fund) have been increasing in recent years, their impact is still small compared to the needs. The main forms of financing of local government are: central government transfers and its own revenues. Vertical and horizontal transfer between different levels of governments (CG and LG) that takes place during the annual budget cycle is not based on clearly defined criteria and in a transparent way, or does not match the needs for expenditures at the local level. This creates a considerable level of instability (illogical movement) of revenues and expenses during the budget cycle units, as a result created a high degree of unpredictability of revenue and expenditure of local units.Currently, local government units funded from central government about 60 percent of local budget, which shows the low level of local autonomy. These and the other problems have made necessary by the territorial reorganization and together with the performance of a deep fiscal decentralization.This article through studding the local decentralization in the last years aims also to make a comparison to previous years and since 20016 is the first year of the complete implementation of the new Administrative and Territorial Reform and the transfer of certain new functions to the local government as well. Keywords : Local government, local finances, transfers conditional, unconditional transfers, their income, responsibility, decentralization, Administrative and Territorial Reform, funding sources etc.
For some years (2008-2010), territorial authorities have been facing a drastic decrease in their resources. The local business tax reform in 2010 has slowed down the dynamism of tax revenues. The regional political representatives no longer have the ability to determine the tax rate. The funds allocated by the State, after having first experienced a freeze in their value, are now reduced as a consequence of successive « stability », « responsibility » and "growth" pacts introduced by different governments. In parallel, the transfers of competences at the beginning of the 2000’s (rail transport and the second act of decentralization) are causing increasingly rigid financial charges for the Regions. Our research aims to understand the causes of these transformations and to qualify the changes that are impacting regional resources. It seeks to determine if there is a growing financialisation of regional politics or if, on the contrary, there is still some local political control despite budgetary constraint. Through a comparative analysis of three Regions (Limousin, Alsace and Nord-Pas-de-Calais), and based on the observation of the reorganization that is happening within regional institutions, our thesis envisages to understand how the political / financial duo evolves in a framework of unprecedented budget constraint.
This study analyzes which types of firm-level shocks were associated with the centralization of strategic decision-making during the recession of 2008-09. We use a unique survey dataset of more than 14000 manufacturing firms from seven European countries which includes direct information on whether the firms centralized or decentralized their strategic decision-making process. Motivated by theoretical approaches claiming that organizations under considerable stress are more likely to centralize, we use multinomial logit models to test whether firms facing a larger fall in turnover, employment, investment or having to postpone their innovations were more likely to change their decision-making process. We find evidence that employment change and postponing innovations are indeed associated with centralization even when we control for ownership, group structure, financing, management, and strategy.
This article analyses aspects of public financial decentralization in Romania, enlightening major problems in public money allocation at county’s administrative level. Actual public finance law and state budget law allow inefficiency and inequity in local public money spending. This happens, in our point of view, because of many rules, criteria and computations missing economic fundamentals and which skip state’s principal objective: to insure citizens’ welfare by providing public goods and services. Our research finds which Romanian counties have difficulties to satisfy local public needs, by confronting financial decentralization level, economic development and public expenditures.
Under the combined pressure of increased urbanization, fiscal adjustments and decentralization, central governments were pushed towards accepting the idea of local government accessing the private finance sources for their public infrastructure and service development investments. While the importance of borrowing increases for local developments, the main challenge many small municipalities have to face is the difficulty to access private financing sources. One obstacle is related to the creditworthiness of the municipal debtor or bond issuer. Sub-national governments can overcome the problem of creditworthiness through the use of credit enhancement mechanisms or techniques. The present paper is the first to discuss the situation of credit enhancements for Romanian municipal bond financing, its consequences and the path that might be followed for their further development. The absence of appropriate credit enhancements can be considered among the factors that contributed to the underdevelopment of the Romanian municipal bond market segment mainly between 2011 and 2014. In order to improve the municipal bond market profile, Romanian local governments should not ignore credit enhancements for any future bond issue and a combination of internal credit enhancements and bond pooling, as external credit enhancements seem to provide a feasible solution.
The present theme is conditioned by the directions of public finance reform in Moldova. The aim of the research is focused on assessing the fiscal decentralization in the Republic of Moldova, aimed at: analyzing financial decentralization conceptual approaches and examining amendments to the administrative and legislative level to strengthen the level of fiscal decentralization in the country. Research methodology is based on processes and of legislative analysis, as well as on literature. As a result, it appears that in Moldova was first adopted a policy document that clearly dimensioned an action plan to achieve a qualitative decentralization in all areas and village structures. Therefore, the author conducted a comprehensive analysis of the process of reforming the central and local public administration in Moldova, presenting argumentative scientific conclusions and formulating own recommendations which would contribute to the continuity of the reform and strengthening budgetary fiscal capacity.
Currently the preparation of the new 2014-2020 multiannual financial framework period is taking place in all areas - e.g. the sectorial legislation, such as the establishment of the new system of Cohesion Policy, is in progress. The rules are being formed in the spirit of a new approach; result orientation will become the main goal which requires a change of attitude in the operation of the institution system. Poland and Hungary are two cohesion countries, both of them using a significant amount of structural funds to finance public investments. Despite the common regulation at EU level the two countries are seemingly choosing different solutions in order to guarantee smoother implementation that will allow policy objectives and results to be achieved more effectively – Hungary is centralizing and Poland is rather decentralizing the system. What is behind this phenomenon? Which is the best way to strengthen the efficiency of the cohesion policy? Our paper will present the institutions systems and mechanism, administrative procedures working in the cohesion policy and compare the Polish and Hungarian systems. It will analyze the directions of changes under the new cohesion policy regulation with regard to the functioning institutions system and national specificities. At the end of our analysis we try to identify good practices and make general recommendations.
Open access
Regional Development and Policy
Hungarian Social, Economic and Educational Studies
Public sector viewed as important with its numerous functions for a long time has recently become the locus of criticisms by many due to its unproductive and excessive size. One of the most emphasized factors which downsizes the public sector and makes it more efficient is the decentralization, moving more weight of this sector towards local administrations. There in fact, exists some predictions of how decentralization, leaving more of the public services and revenue sources to finance them, to sub-national government provides discipline in public sector. In this study, the disciplinary effects of decentralization on the public sector is tested using panel corrected standard errors procedure and the from OECD countries. The results show that decentralized public services and taxes up to some degree, limits the growth of public sector
In this paper the authors present important aspects of local autonomy seen through the lenses of decentralization and regionalization. It shows that local finance can contribute to community development only to the extent that the law provides financial autonomy so that the administration can attract European funds for local projects.
There is broad agreement among economists and policy makers that economic growth is nowadays largely driven by the capacity of firms to innovate. The financial and economic crisis that started in late 2007 has had a far reaching impact on countries around the world. Spain has been one of the countries worst affected. As a result, the government has reduced public funding in R&D. At the same time, the continued credit crunch has dramatically worsened the possibilities for financing new ideas and projects. One of the consequences of the economic crisis is that many companies have reduced their innovation-related activities; however, some firms have been more resilient than others and recent studies also show that there are important differences across countries regarding the degree to which the economic crisis has affected firms? innovation investment. It has been argued that national institutional settings and the structural characteristics of national innovation systems have played an important role in shaping how firms have responded to the crisis. However, within a country, regions may also matter. Learning processes underlying innovation are localised and locally embedded, and regional innovation systems (hereafter, RISs) may play a role too. Spain provides an interesting setting for analysing the role of regions, as it is a country with a highly decentralized unitary state with a unique framework of territorial administration. Spanish regions have very diverse economies and also different degrees of fiscal and political autonomy. They vary greatly in terms of their innovation performance as well as regarding their regional innovation and technology policies. Moreover, their responses to the economic crisis in terms of regional policies have not been the same. A focus on regional difference can contribute to a better understanding of the innovation strategies employed by firms during the crisis. To date, we still know very little about regional differences and the degree to which regions have shaped firms' innovation behaviour in response to the economic crisis. Our analysis contributes to this literature by drawing on a large national sample of micro-data for Spanish manufacturing and service sector firms. Our results show that the crisis has discouraged a significant number of firms from engaging in innovation. These have been mainly small firms and occasional R&D performers. Significant regional differences are also found in the degree to which the crisis has affected firms? innovation expenditures, even after controlling for sectoral differences and firms? structural characteristics. The Basque Country stands out in our analysis. Firms with R&D employment in this region show a significantly lower probability of having abandoned innovation activities and a somewhat higher probability of even having increased their innovation effort. This regional effect has been especially important for small and medium sized companies.