The principle of financial independence is particularly linked to one of the budgetary principles, i.e. the principle of material unity. The article aims to describe the principles of financial independence and the principle of material unity in the financing of municipalities. To obtain this objectives, we focus on explaining the essence and goals of the principles of financial independence and the principles of material unity, as well as on exceptions to the principles of unity. The article bases on the dogmatic and legal method. The presented considerations lead to the conclusion that the introduction of many sources of exceptions to the principles of material unity results from additional regulatory arbitrariness, limiting decentralization and management independence.
Sections 5.1–5.4 feature detailed considerations of capital market law, payment service law, anti-money laundering law, tax law and budget law. These are necessary, because public law is less flexible than private law, and creates the most significant legal risks for the financing of long-term and capital-intensive investments using distributed ledger technology. This analysis is completed in Sections 5.5 and 5.6 by in-depth reflections on important legal issues for the modern world, especially in a global context, i.e., the legal aspects of the implementation of the sustainable development goals and analysis of the legal aspects of personal data protection (including the EU digital identity).
In modern conditions, taking into account decentralization, martial law and economic instability in Ukraine, local communities are forced to look for alternative sources of financing to ensure sustainable development. One of the most effective tools for attracting resources for the implementation of socioeconomic, infrastructure and humanitarian projects is international grant financing. Grants are provided by international organizations, foundations, governments and private donors to implement programs that contribute to the development of social, scientific, technological, environmental and other areas of strategic importance. Unlike loans, grants are free financial assistance and are provided on a competitive basis and with clearly defined conditions, including the use of funds and reporting on results. The article studies the impact of international grant financing on the economic development of a local community, namely the Bakhmach urban territorial community. The theoretical foundations of international grant financing are considered; the dynamics of budget revenues and expenditures of the community are analyzed; an assessment of the contribution of grant funds to the development of individual areas (education, healthcare, social protection, etc.) was carried out. A practical analysis of the activities of the Bakhmach urban territorial community showed that international grant funding has a positive impact on economic development, modernization of infrastructure, improvement of the quality of education and medicine, expansion of social protection and activation of cultural and sports life. Thanks to the grants involved, the community managed to implement a number of important initiatives, including the construction of a shelter for a lyceum, modernization of educational offices, creation of a crisis room for victims of domestic violence, updating medical equipment, repair of cultural centers and other projects that directly affected the well-being of the population. The prospects for further research in this area are the development of practical recommendations for improving the interaction between local authorities and international donors.
Oana Camelia Iacob Pargaru, Carmen Elena Spiridon, Ovidiu Andrei Cristian Buzoianu, Nicolae Gabriel Uta
Abstract When a Romanian entrepreneur is looking for European funds to finance his business, it is essential for him to understand the terms of the loan and the details about the financier, just like in any other loan agreement. The aim of this article is to present the challenges of projects implemented with funding from European Union funds. The research methodology involved a literature review followed by an analysis that examines different categories of public structures, including deconcentrated or decentralized units of central public administration, local public administration units, autonomous kings, state commercial companies or local authorities, units of state education and research, hospitals, and intercommunity development associations. The findings of the research highlighted the specific types of organizations that received financial support from EU-funded programs. Thus, the funds allocated to Romania by the European Union, considered from the point of view of the investment strategy and their non-refundable nature, constituted a substantial asset for the development of the Romanian economy and society in the short, medium and long term. In addition, these funds represented an element of budgetary sustainability. The results of the projects that were financed from European funds are numerous. Each of these is an illustration of a successful effort that has the potential to give rise to additional initiatives of equal significance in the context of the new opportunities that the European Union will fund.
DeFi in the insurance market. The acceleration and intensification of digitization processes, i.e. the growing use of digital technologies and the reliance of a large part of the economy on the Internet, has begun to change the emphasis on the role and importance of traditional architecture in the financial market, including the financial intermediation market. DeFi, or “decentralized finance”, is a part of the main trend of these changes and they have also found their place on the insurance market. On the one hand, their presence may significantly change the shape of the insurance market due to the fact that the idea of DeFi indirectly means building services and products separate from the traditional financial system. DeFi insurance and alternative risk coverage have the potential to successfully fill the insurance coverage gap for crypto-assets and limit the risk exposure that accompanies entities active in a decentralized economy.
Martina Halásková, Renata Halásková, Beáta Gavurová, Matúš Kubák
Services are a dynamically developing economic sector in all countries. The paper focuses on public services, evaluated from the perspective of fiscal decentralization. It aims to evaluate the level of fiscal decentralization of expenditures in selected categories of public services in European countries. For this purpose, government expenditures by the local government sector are analyzed in the set of the selected 28 European countries in the period 2010-2018. Cluster analysis has been carried out in order to determine four clusters of countries based on their level of decentralization of expenditures on services. The results show differences in the extent of decentralization between the European countries in the provision of specific public services and reflect the form of financing of local public needs. A low level of fiscal decentralization of expenditures on services (public order and safety; housing and community amenities; recreation, culture, and religion) was observed in the majority of the countries. However, the majority of the countries failed to prove a high level of fiscal decentralization of expenditures on services (social protection, health, education) and a medium level of decentralization of expenditures in terms of general public services and services of economic affairs. These findings demonstrate that the degree of decentralization of public services is determined, to a certain degree, determined by country history and its geographical location, as well as by the different roles of sector-specific public policies. The findings can be helpful for creators of local public policies, strategic plans, and financial concepts.
Проблематика роботи відповідає завданням адміністративної реформи, найважливішим результатом якої повинні бути докорінні зміни в управлінні територіальними громадами, пов’язані з отриманням нових можливостей розвитку й задоволенням потреб місцевих спільнот. Оскільки місцевий бюджет серед інститутів місцевих фінансів відіграє основну роль у забезпеченні виконання функцій і завдань місцевими органами, то упродовж останніх років було приділено багато уваги посиленню його впливу на економіку і соціальну сферу як інструменту фіскальної діяльності, забезпечення громадських послуг і економічного зростання. Ґрунтовнішого наукового осмислення та практичного вирішення потребують питання власних доходів місцевих бюджетів з позицій організаційно-структурних аспектів з метою забезпечення повноважень органів місцевого самоврядування вагомими джерелами фінансування. Питання фінансового забезпечення виконання органами місцевого самоврядування видаткових повноважень є особливо актуальним.
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
The economic and civic development of local communities is based, first of all, on the local public finance system, which must meet certain conditions so that the management of the territorial administrative units and the functioning of the local authorities meet the standards of a quasi-society. This paper is topical as the issue of local public finances is at the center of the current political debate as all the member states of the Council of Europe are confronted with the issue of harmonizing two diverging trends, namely: controlling and reducing spending and giving as much as possible large autonomies of local communities. The main objective of the paper is to identify solutions to ensure a more balanced allocation of financial resources between different levels of administrative organization, taking into account the budgetary regulation that is imposed at all levels of public administration. The data processing provided by the Ministry of Public Finance and the Court of Accounts highlighted the degree of dependence of local budgets of communes, cities, municipalities and counties on the consolidated general budget in the context of a decentralized process that is desirable to be as efficient as possible.
The ongoing processes of decentralization, which are present in many countries, cause a growing proportion of public funds to be collected and spent at the local government tier, which necessitates the use of fiscal rules not only at the state level. This issue may raise some controversy due to the specific character, autonomy and empowerment of local government and local communities. Therefore, the analysed subject is based on three questions: 1. Limited fiscal autonomy of local self-government and it's consequences 2. A real need for and the scope of the use of fiscal rules in local government finance, 3. The informal factors that directly determine the indebtedness in local governments in the light of literature and selected empirical research. We use a descriptive method supported by an analysis of financial data and a case study as it presents selected aspects of Polish experience in the subject matter. The results of the analysis seem to point to the necessity of the use of fiscal rules in local government finance, which paradoxically strengthens the processes of decentralization, democratization, technological advancement and globalization. Some primary results of our research indicate investment expenditure, own revenues, number of companies (level of GDP) and election cycle as important, significant factors (in statistical meaning) effecting the local deficit and debt. The conclusions list the advantages of the use of fiscal rules at the local government tier and large diversity of informal conditions across the whole country.
The article deals with questions about the rules of effective, efficient and rational management through the results of marketing communications of administrative units of local self-government. The authors point to the Polish experience in this area with regard to systemic transformation since 1990, based on the decentralization of power and the effective dismissal of social potential, by focusing marketing communications of local governments on activating citizens to take action and ensure citizens' responsibility for the environment. These changes set new tasks for local governments, the proper implementation of which should be based on the implementation of management through the results that can be identified in local government bodies as a process of setting measurable goals for the administration responsible for specific public tasks. implementation of the mechanism of continuous monitoring of these goals, as well as the adaptation mechanism in the context of changes in the internal and external conditions of the organization and informing the public about the results achieved. The results management is based on modern tools used in public finance management, that is, budget execution and management. In order to improve the activities of local self-government bodies, the authors offer lifelong learning in the form of short forms of support (training, courses, seminars) in the process of non-formal learning, taking into account the educational prerequisites for sustainable development. The authors recommend short forms of acquiring new competencies required by the changing environment, challenges related to technological changes and increasing efficiency of market institutions (enterprises), indicating that non-formal education in the field of results management, combining economic, social and ecological aspects is an indispensable element improving the staff of local government administration, aimed at the proper implementation of statutory tasks and competent service of the local community while at the same time rational and effective use of public funds, and thus an essential element of sustainable city management. New management tools implementation combined with the education process can be treated as organisational innovation.
Open access
Polish socio-economic development
Local Governance and Planning
Sustainable Development and Environmental Management
The paper is dedicated to the analysis the financing situation and level of decentralization in the municipalities in Poland and Turkey. The analysis covers years 2012–2016. Due to decentralisation reforms in both countries the basic level of subnational governments are municipalities. The decentralization process includes three categories: political, administrative, and fiscal. Because of above the municipalities in Poland and Turkey are various with the number of units, average municipal area, average municipality size, sources of the revenues and directions of money spending.
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.
In last thirty years Poland has gone a long way toward democracy and decentralization. Role of public participation in planning is increasing rapidly and recently many new instruments of empowering the community is being introduced, participatory budgeting is one of the most important. On the other hand, urban regeneration is one of the most important challenges of polish cities are facing. Technical and transport infrastructure investments are, in most cases, financed by public sphere. We can also observe increasing role of NGO's in neighbourhood regeneration process but their scope of actions is mostly limited to soft projects. The paper tries to answer the question whether participatory budget can fill this gap and be a source of financing local community needs. This paper shows the creation and evolution of participatory budgets in Poland as well as the process of their implementation including examples of projects financed from participatory budget in Polish cities. It consists of analyses of participatory budgets’ expenditures structure and influence of the projects on the neighbourhood and the city. It also assesses long term influence and identify barriers, challenges and opportunities of using this instrument in urban regeneration process.
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
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.
Following the completion of the process of decentralization of the public administration in Poland in 2003, a number of tasks implemented so far by the state authorities were transferred to the local level. One of the most significant changes in the methods of financing and management of the local authorities was the transfer of culture and national heritage-related tasks to a group of the own tasks implemented by local governments. As a result of the decentralization process, the local government units in Poland were given a significant autonomy in determining the purposes of their budgetary expenditure on culture. At the same time they were obliged to cover these expenses from their own revenue. This paper focuses on the analysis of expenditure on culture covered by the provincial budgets, taking into consideration the structure of cultural institutions by their types in the years 2003, 2006, 2010 and 2012. To illustrate the diversity of the expenditure on culture by the type of the institutions in particular provinces, one applied the location quotient (LQ), which reflects a spatial distribution of expenditure on culture in relation to reference expenses incurred by the cultural institutions in Poland.
The sustainable development became a goal for knowledge society, but one of the main question in literature remains as how close is the relationship between economic dvelopment, knowledge society and local governments' level. Given the great diversity of situations and frameworks both across countries and within them in the European Union, I consider that each country must have own policies designed to implement process of decentralization with the commitment of "healthy" economy in a society dominated by the technology and innovation. In this context, the problem occurs in decentralization should be managed on two levels: on the one hand in terms of central-local budgets relations, and on the other hand, in the local public finance structural plan. The paper will try to emphasize the connection between decentralization, local economic sustainable development and knowledge society, taking into account an overview of this three aspects and empirical evidences. In this regard, I will use the background offered by literature and the official statiscal data for analysis to identify the variables which explain decentralization and local economic development in the knowledge society. I estimate the analysis to confirm the hypothesis that there are good aspects, but also deficiencies that require solutions and budgetary policy options as part undisputed positioning local government finance as an engine of development of the whole nation. I consider that the paper can be a useful viewpoint in understanding local public finances in decentralization, which allows researchers to include other sources of information for researching an in a much more complex approach.
Decentralization of public finance in Poland was an important element of changes in the political system of the country. As a result, some tasks of the state were transferred to the local government level. The Public Finance Act of 2009 introduced new public management methods, such as the performance-based budget and the long-term financial forecast, to the local government finance management. The purpose of this paper was to analyse the budget expenses on cultural tasks incurred by local government units in Poland in the years 2003- 2010 and the impact of the attempted application of the performance budgeting method to local government expenses relating to this field of economy.
Polish Abstract: Rozwoj edukacji jest jednym z priorytetow polityki Unii Europejskiej od początkow jej istnienia. W ciągu ostatnich 15 lat szczegolny nacisk kladziony jest na modernizacje szkolnictwa wyzszego, ktore postrzegane jest jako kluczowe dla rozwoju zarowno calej Unii Europejskiej, poszczegolnych panstw czlonkowskich, jak i indywidualnych obywateli. Postulowane reformy wymagają zmian w obszarze zarządzania, jak i finansowania uczelni, a w szczegolności odejścia od scentralizowanego finansowania zorientowanego na zasoby w kierunku zdecentralizowanego finansowania zorientowanego na wyniki. Transformacja ta powoduje koniecznośc mierzenia efektywności i skuteczności szkolnictwa wyzszego w roznych jego aspektach, w tym rowniez w obszarze edukacji. Artykul koncentruje sie na badaniu mozliwości zastosowania modelu J. Mincera do mierzenia wplywu wyzszego wyksztalcenia na poziom wynagrodzen i wyznaczania tzw. prywatnej stopy zwrotu z inwestycji w edukacje. Badania empiryczne przeprowadzone są na danych pochodzących z niemieckiego badania panelowego SOEP.English Abstract: The development of educational system has been one of the priorities of European Union policy since the beginning of its existence. In the course of the last 15 years particularly strong emphasis has been placed on modernization of higher education, which is perceived as key factor for development of European Union, each member state separately, as well as individual EU citizens. The postulated reforms require changes both in the area of governance and funding of the universities, in particular a shift form centralized input oriented funding mechanisms towards decentralized outcome oriented financing is needed. This transformation causes necessity for measurement of efficiency and effectiveness of various aspects of higher universities activities, including education area. The paper focuses on application of Mincer model in analysis of higher education influence on the level of wages in order to determine the private rate of return to education. Empirical research have been conducted using the data from German Socio-Economic Panel Study (SOEP).
The analysis of the administrative capacity of institutions in the regional development starts from the analysis of the existing framework for the implementation of regional politics in Romania and studies the extent to what the structures and competencies were regionally enlarged as to contribute in the regional development. The basic hypothesis considered for such analysis had in view the fact that the differences recorded with respect to the implementation capacity of the regional development policy are caused by the various levels of the administrative capacity of the national, regional and local institutions existent in Romania. Although the regional development activity is, both centrally and regionally, dominated by the Regional Operational Programmme 2007-2013 (ROP) implementation, significant activity also exists outside the ROP, but only regionally. The regional strategies incorporate to a great extent the strategic objectives established nationally, being coordinated with the national financing instruments for economic, social and territorial development. The undertaking degree of responsibilities regarding the objectives fulfillment of the regional development policy is relatively low both regionally and locally, and the main indicator which contributes in sustaining this conclusion is the absence of an adequate level regarding the property holding on certain strategies and also the methodological lack of strategies. Nationally, the current activity of Ministry of Regional Development and Tourism in the field of regional development totally overlaps the management activity of ROP. The management of structural funds 2007-2013 granted through ROP deals with various situations in which, due to the fact that the Law of regional development remained behind the legislation for the structural instruments implementation in Romania, additional resources are necessary to be granted in order to be found solutions through other types of regulations. The Romanian legal and institutional setting allowed a centralized top-down approach for the regional development process and brought forward the approach of the type â€Å"local development which falls among certain priorities of regional development established nationally†. Definitely, the local development is important for the regional development, but it is not self-sufficient in this respect. Therefore, the centralized approach should be completed by a decentralized approach, as a natural next phase.
Romania's integration in the European Union implies, apart the complex process of policy transfer, the learning of new modes to make policies characteristic to a multi-level governance and partnership culture. Of the different levels of governance of the European model, the regional level ("regional governance") most faithfully reflects, in our opinion, the complexity of reconfiguring the role of state in economy, at the beginning of this new millennium, in the European Union space and presents the highest practical importance for Romania, as a new Member State of the European Union, for, at the regional level, the structures are more flexible and the good practices are more rapidly assimilable. The selection of the best regional growth and development economic policies, the choosing of the objectives out of a series of competing options, the calibration in time and space of powers, roles, capabilities, and responsibilities and the encouragement of the win-win solutions call upon the choice and combination of some appropriate and efficient instruments. Representative for the new context, the regional growth and development policy must integrate, in Romania too, more knowledge, more creativity, new combinations of capabilities and new fields of expertise. This paper presents preliminary research results afferent to the post-doctoral research project: "Growth and regional development economic policies. Challenges for Romania in the context of economic-financial crisis and European model integration", carried out in the project "Economic scientific research, reliance of human welfare and development in European context", the Romanian Academy, "Costin C. Kiriţescu" National Institute for Economic Research, project financed for the 2010-2013 period from the European Social Fund (EFS) and implemented by the Romanian Academy, Costin C. Kiritescu National Institute for Economic Research, in the period of time 1 December 2010 - 30 November 2012, coordinator: Professor Dr. Valeriu Ioan Franc. The question we intend to answer, in the present phase of our research, based on the comparative analysis of the decentralisation systems of several Member States of European Union, respectively on the analysis of the regional disparities existing at the European Union level and of the effects of the economic integration, is- to what extent the capabilities of the regional policy should rather be concentrated in the hands of regional authorities or of the European Union than to be left individually to the Member States which should conceive their own regional policy? What we intend in this paper, based on the analysis of some experiences to decentralize the capabilities of economic policy at the European Union level, is to identify the regional implications of the interconnection of decentralization, centralization, respectively supra-nationalization tendencies and, implicitly, the analysis of the way to reconfigure the role of state in economy at the regional level, in the context of integration in the European model. The examination of the way to reconfigure the role of state in economy at regional level requires the review of the allocative, distributive, and regulating roles of the state from a regional perspective, the analysis, on one side, of the decentralization of economic policy capabilities from the national level to the regional level (for example, national level: pure public goods supply, for instance, national defence and the centralization of fiscal policy capabilities in order to achieve macroeconomic stability and revenue redistribution; regional level: mixed public goods supply, for instance, waste collection and community policy), on the other hand, the centralization/decentralization of regional capabilities at the European Union level.
This paper presents the significance of the issues related to the activity of territorial self-government for the social and economic development of Ukraine. The efficient operation of self-government in any country is unfeasible without financial resources. Polish experience in the development of territorial self-government is particularly valuable in relation to the reform of Ukraine’s self-government. The paper outlines the differences in the structure and operation of territorial self-government in both countries. The paper is concluded with numerous observations on the direction of selected reforms of Ukrainian self-government. It shows the weaknesses of local self-government in Ukraine, which result from the lack of decentralization of finance and the small amount of state-collected taxes. The conclusions end with the observation that a consistent development of the Ukrainian state is required for Poland to develop well.
This paper presents the significance of the issues related to the activity of territorial self-government for the social and economic development of Ukraine. The efficient operation of self-government in any country is unfeasible without financial resources. Polish experience in the development of territorial self-government is particularly valuable in relation to the reform of Ukraine’s self-government. The paper outlines the differences in the structure and operation of territorial self-government in both countries. The paper is concluded with numerous observations on the direction of selected reforms of Ukrainian self-government. It shows the weaknesses of local self-government in Ukraine, which result from the lack of decentralization of finance and the small amount of state-collected taxes. The conclusions end with the observation that a consistent development of the Ukrainian state is required for Poland to develop well.