Blockchain Papers

Bálint Hilbert

A tanulmány Bécs és Budapest 1880 és 1910 közötti várospolitikai hatékonyságát a két város infrastrukturális kiépülésének, valamint az azt irányító városi kormányzási kontextus komplex kvantitatív és kvalitatív elemzésén keresztül vizsgálja. A kutatási módszertan két dimenzió (kormányzási és infrastruktúrakiépítési), valamint három szempont (építési, pénzügyi és területi) ötvözésén alapul. A kormányzási dimenzió keretében – elsősorban jogszabályok elemzésével – a szerző feltárja Bécs és Budapest autonómiájának általános jellemzőit, építési és költségvetési jogköreik gyakorlásának részleteit, valamint kerületeik hatásköreit. Az infrastruktúrakiépítési dimenzióban a kutatás Bennett-féle komplex mutató, duál-mutató, valamint lánc- és bázisindex számításával, továbbá költségvetési adatok bevonásával végez több infrastruktúrára kiterjedő kvantitatív elemzést fővárosi és kerületi szinten, bemutatva Bécs és Budapest alapvető humán és fizikai infrastruktúrafejlesztésének eredményességét, továbbá területi egyenlőtlenségeinek 1880 és 1910 közötti alakulását. A dimenziók és szempontok eredményeinek szintézise rámutatott arra, hogy az autonómabb és decentralizáltabb kormányzású Bécs – két jelentős városbővítési hullám kihívásai mellett – a statisztikai adatok tükrében hatékonyabban és kisebb egyenlőtlenségekkel építette ki főbb infrastruktúráit, mint az állami befolyásnak fokozottan kitett, centralizáltabb szervezetrendszerű Budapest. A kutatás nem csupán a két város dualizmus kori történeti feltárása, hanem – az infrastruktúrák és intézményi struktúrák korokon átívelő útfüggőségének elvére alapozva – későbbi korszakok várospolitikai eredményességének vizsgálatához is komplex módszertani alapot szándékozik biztosítani. | This study examines the urban policy effectiveness of Vienna and Budapest between 1880 and 1910 through a complex quantitative and qualitative analysis of the cities' infrastructural development and the urban governance context that managed it. The research methodology is based on the integration of two dimensions (governance and infrastructure development) and three aspects (construction, financial, and territorial). Within the governance dimension – primarily by the analysing of legal regulations – the author explores the general characteristics of Vienna’s and Budapest’s urban autonomy, the details of the exercise of their construction and budgetary powers, as well as the competencies of their districts. In the infrastructure development dimension, the research performs a multi-infrastructure quantitative analysis at both the capital and district levels using Bennett’s composite indicator, dual indicator, chain and base index calculations, as well as budgetary data. This provides an overview of the effectiveness of Vienna’s and Budapest’s fundamental human and physical infrastructure development and the evolution of spatial inequalities between 1880 and 1910. The synthesis of the results across dimensions and perspectives revealed that, in light of statistical data, Vienna – with a more autonomous and decentralized system of governance – developed its key infrastructures more efficiently and with fewer inequalities, despite the challenges of two major waves of urban expansion, than Budapest, with its more centralized organizational structure, which was more strongly exposed to state influence. Beyond offering a historical analysis of the two cities during the dualist era, the research also aims to provide a complex methodological foundation for examining urban policy effectiveness in later periods, based on the principle of path dependency in infrastructures and institutional structures across different eras.

Oleksandr Manoylenko, S.S. Kuznetsova, Anton O. Pysakovskyi

The article explores the conception of decentralized finance (DeFi) as one of the key innovations of the modern digital economy, which has the potential to fundamentally change traditional approaches to providing financial services. An analysis of the main characteristics of DeFi protocols, their functional capabilities, and differences from centralized financial institutions has been conducted. Particular attention is paid to the analysis of such advantages of DeFi as open access to financial products, transaction transparency, process automation based on smart contracts, and the reduction of dependence on centralized intermediaries. At the same time, key issues in the development of DeFi have been outlined, including high technological complexity, regulatory uncertainty, financial volatility of assets, and risks associated with the vulnerability of smart contracts. The article emphasizes the need to create tools for a comprehensive assessment of the investment potential of DeFi protocols, as traditional analysis methods, which are primarily based on profitability or liquidity indicators, do not fully reflect the specifics of decentralized systems. In response to this issue, the conception of a multifactor indicator DIAD (DeFi Investment Attractiveness Dashboard) has been proposed, which allows for the integration of the assessment of financial parameters (return, volatility, liquidity), institutional characteristics (level of governance decentralization), and behavioral variables (user activity) into a single model. The developed methodology enables objective cross-platform comparison of various DeFi protocols, which is crucial for making informed investment decisions in the high-risk environment of digital assets. The article forms the theoretical basis for further empirical research on the efficiency of decentralized platforms, the development of risk management strategies in the DeFi sector, as well as the advancement of regulatory initiatives aimed at ensuring the resilience of the new financial ecosystem in the Web3 environment. The obtained results are of practical significance for investors, developers of decentralized applications, and regulatory bodies working on the integration of innovative financial technologies into the global economy.

Ágnes Juhász

The study focuses on the examination of the most fundamental concept of civil law, especially the right in rem, namely the concept of things. The author seeks to answer the question of how new phenomena appearing because of technological development, such as digital assets, including various crypto assets like tokens, can be integrated into the system of classical civil law, whether they may be subject to property rights or the civil law rules applicable to the property. To answer this question, the author first explores the concept of things based on the old Hungarian private law literature and the provisions of the earlier and current Hungarian civil codes, presenting contemporary private legal opinions. Then, she deals with the legislative extension of the rules governing things and reviews which assets have been subject to a possible revision of the conceptual framework of the thing. The author pays particular attention to the examination of digital assets, defining and classifying tokens based on the MiCA regulation recently adopted by the European legislator. In the final part of the study, the author deals with the category of non-fungible tokens, highlighting the problems that are currently identifiable and clearly need to be solved in the future.

Botond Breszkovics

A nem helyettesíthető vagy másként nem felcserélhető tokenek (non-fungible token, NFT) attól függetlenül, hogy még egy évtizedes múlttal sem rendelkeznek, már számos jogsértés melegágyaként szolgáltak. A tanulmány célja egy összefoglaló áttekintést nyújtása az elmúlt évek iskolapéldájának tekinthető befejezett és folyamatban lévő NFT kötődésű jogivitákról, kiegészülve egy rövid, kapcsolódó jogelméleti háttér információ nyújtással. Ennek érdekében, jelen tanulmány vizsgálódása az angolszász és a kontinentális jogrendszerek szerzői jogának főbb elméleti és fejlődési mérföldköveinek áttekintésével veszi kezdetét. Ezt követi az NFT-k szerzői jogi vonatkozásainak alakulásának tárgyalása az EU-ban, az USA-ban és Magyarországon. Végül ismertetésre kerülnek a közelmúlt mérvadó NFT jogesetei, összegző gondolatokkal zárva.

István Ambrus, Kitti Mezei

Abstract Money laundering is one of the most important criminal offences today, perceived in the context of economic operation. Nevertheless, money laundering is a constantly changing phenomenon that is also influenced by the latest technological advancements. In this study, our aim is, after briefly outlining the phenomenon of money laundering, to review the new statutory definition(s) and those assessment criteria that may also be of significance for legal practice in this context from 2021 onwards in Hungary. Subsequently, we will describe the current challenges of cryptocurrencies regarding the new Hungarian and EU legislation on money laundering. The method we use is criminal law-dogmatic and retrospective analysis. The analysis concluded that the Hungarian legislator has significantly broadened the scope of money laundering, and a much wider spread of this offence is predicted for the future.

Hilda Henrietta Farkas

Szakdolgozat témája egy olyan szoftver elkészítése, amely segít a felhasználóknak a jelszavakat memorizálni. Az emberek többségének rengeteg jelszót kellene megjegyeznie, mely kihívást jelent. Ha egy jelszó túl egyszerű, akkor nem nyújt elegendő biztonságot, ha túl bonyolult, akkor nehezen lehet megjegyezni. Az alkalmazásom lényege, hogy megkönnyítse a felhasználóknak a bejelentkezését a Bitcoin pénztárcájukba. A felhasználók jelszavak helyett egyedi mintázatot választhatnak ki, amely segítségével képesek lesznek felidézni a kulcsszavakat, képeket, amelyek újra generálják a privát kulcsot. A program egy hideg tárolási módszerhez tartozó implementáció. A kriptovaluta pénztárca nem csatlakozik az internethez, így a rosszindulatú támadok nem férhetnek hozzá. A projektmunka megvalósításához Python programozási nyelvre, a grafikus felhasználói felület megjelenítéséhez tkinter-re volt szükség.

Vivien Prokopics

A kriptovaluták világa sokak számára ismeretlen terep, pedig egyre inkább kezd a mindennapjainkban is megjelenni akár csak egy kósza hirdetés erejéig, különböző platformokon és applikációkon keresztül. Használata és a kriptoeszközökkel való kereskedés egyre elterjedtebb, és népszerűségük miatt feltehetően csak tovább fog gyarapodni. Dolgozatom fő célja, hogy felfedjem azokat az elemzési és értékelési területeket, amelyek jelenleg a rendelkezésünkre állnak és bemutassam, hogy miért is nehéz következtetéseket levonni a jövőbeli értékükre vonatkozóan. Azt feltételezem, hogy hirtelen ingadozások jellemzik a tőzsdét, hogy hasonló tendenciák figyelhetőek meg az egyes valutáknál, amit első sorban a bitcoin ára és mozgása határoz meg.

Dominik Biki

Az utóbbi évtizedekben számos olyan gazdasági átrendeződésnek lehettünk tanúi, amelyek globális szinten jelentős hatást gyakoroltak a jelenlegi piacgazdaságra. Korunk egyik legjelentősebb pénzügyi innovációja a kriptovaluták megjelenése, amely mára a digitális világgazdaság egyik fő mozgatórugójává vált. A kriptovaluták egy olyan új, eddig ismeretlen befektetési formát és jövedelemszerzési lehetőséget kínálnak, amelyek minden vállalkozó kedvű embernek elérhetőek a digitális felületeken keresztül. Ez a fajta alternatív befektetési lehetőség azonban számos kockázati faktorral rendelkezik, amelynek hátterében egyfelől a felhasználói bizonytalanság, a működési mechanizmusok megértésének és átlátásának hiánya, másfelől a kriptovalutákat érintő felszínes ideológia áll. A dolgozatom célja, hogy közelebbről megvizsgálva a jelenséget rávilágítsak a téma aktualitására, valamint a szakirodalmak és saját kutatások áttanulmányozásával és kiértékelésével választ találjak egy sokakat foglalkoztató központi kérdésre: Az elkövetkező években tovább növekedhet-e a kriptovaluták iránti kereslet és befektetési hajlandóság, vagy az instabil piaci körülmények hatására egy egészen más tendencia várható? Tanulmányomban ismertetem a kriptovaluták feltalálásának történetét, elterjedésének és népszerűségének okait, korlátait és működési mechanizmusát, a Bitcoin alapjául szolgáló blockchain-rendszert, valamint bemutatom hogyan alakult a Bitcoin árfolyama és befektetési rátája jelentős gazdasági események hatására a globális világgazdaságban, továbbá megvizsgálom, hogy fizetőeszközként, illetve befektetési lehetőségként milyen szerepet játszik a jelenlegi gazdaságban.

Krisztián Norbert Karikás

Az elmúlt évtizedben az élet minden területén nagy mértékben jelentek meg új technológiák, olyan online rendszerek, amelyek mindennapjaink részévé váltak. Ezeknek az innovációknak a célja, hogy mindennapi életünket megkönnyítsék ebben a rohanó világban. A sport iparágában is egyre nagyobb teret nyer a digitalizáció. Az élsporton keresztül egészen a szabadidős sportig rengeteg módon jelen vannak az új technológiák. Az egyik ilyen innovatív technológia, amely az elmúlt években egyre többször jelenik meg az iparágban az a blokklánc rendszerek és a blokklánc rendszeren alapuló kriptovaluták, amelyek segítségével új szponzorok jelentek meg a sportban és ezeknek a szponzorációs szerződéseknek köszönhetően több milliárd dollár került a sport iparágába. Dolgozatom célja bemutatni ezt az új technológiát és a napjainkban előforduló felhasználási formáit, külön kitérve a sportban való elterjedésére és az ott megjelenő innovációkra.

Patrik Talan

Kripto valute definiramo kao digitalni novac, odnosno zapise unutar programa koji su implementirani na više međusobno povezanih računala, s krucijalnom karakteristikom nepostojanja središnje institucije koja ih izdaje ili upravlja njima. U završnom radu razmatra se značaj kripto valute u ekonomiji te se time istražuju ekonomske implikacije kripto valuta kroz analizu slučaja na primjeru Bitcoina kojom je prikazano ispunjavanje potreba kompleksnog tržišta današnjice uz kontrolu mase u čijem je vlasništvu. Jedan od razlog stvaranja Bitcoina bio je odgovor na globalnu ekonomsku krizu 2008. godine, kada je nestabilnost tradicionalnih valuta i bankarstva stvorila novu potrebu za alternativnom imovinom i ulaganjima bez središnje vlade ili bankarske organizacije. Bitcoin je prva digitalna valuta konstruirana na decentraliziran način. Faktori koji utječu na porast popularnosti kripto valuta su velika praktičnost i brzina obavljanja elektroničkih transakcija.

Gábor Dobos

After decades of the Communist regime and the Soviet-type council system, a decentralized local government system was introduced in Hungary in 1990. As autonomy at the local level was considered a cornerstone of democracy, local governments gained wide autonomy in terms of their constitutional protection, service-providing competencies and (formal) financial capacities. The extensive decentralization which occurred during the democratic transition resulted in many deficiencies on the sub-national level: the local level was highly fragmented into more than 3,000 local units without any substantive differentiation in tasks between them, while the middle level (county governments) was designed to be weak with basic service-providing tasks, and thus could not become a strategic planner and coordinator of the regions (see Dobos, 2016). In relation to their tasks, the local governments were under-financed and the fragmented local level could not provide services in a cost effective manner. Based on the initial experiences of the local governments’ functioning, scholars and practitioners rapidly came to a consensus about the need for reform of the sub-national institutions (Pálné Kovács, 2016a). However, as the prerequisite of a comprehensive local reform was the political consensus of the national parties (as any major changes required a two thirds majority in the parliament), successive national governments were forced to use financial measures to lessen the fragmentation and to enhance the effectiveness of the system (see Dobos, 2020).

Gyöngyi Bugár, Márta Somogyvári

Az utóbbi évtized talán egyik legérdekesebb pénzügyi innovációja a bitcoin és más kriptovaluták megjelenése.Ez a fizetőeszköznek szánt befektetési forma ma már mindenki számára elérhető, akár az interneten, akár a Budapesten is megtalálható bitcoin ATM-eken keresztül.Azonban sem az egyszerű felhasználók, de még a pénzügyi szakemberek jó része sincs tisztában a bitcoint megalapozó ideológiával, e kriptovaluta működési mechanizmusával és a benne rejlő kockázatokkal.Célunk az, hogy bemutassuk azt az elméleti problémát (double spending

Attila Szigeti

Investigation of the security of the Ethereum Ropsten test network in connection with the Echosafe application used to record verbal contracts developed by Blocksafe Kft

Viktor Halász

The author provides an overview of how cryptocurrencies are used by criminals, and how seizing and storing can be managed in criminal investigations.

Alexandra Anna Lakatos

Focusing on international and Hungarian experiences, the author provides an overview of IT-related crimes and the Bitcoin-phenomenon.

Györgyi Nyikos, Robert Tałaga

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.

Izabella Barati-Stec

This paper reviews the waves of democratization and the development of the public administration and public finances in Hungary, with special attention municipalities caused by the changes in sub-national finance regulation since 2010. During the transition yeas, Hungary was very forward looking and the first among CEE countries to end central planning and to introduce market rules into the economy. Everybody expected the decentralization to be a success story. 25 years later, Hungary not only failed to meet the expectations, but also undergone though a situation in 2008 to start a massive recentralization process. This paper puts fiscal decentralization in Hungary in a historical context while critically investigating the findings of recent literatures on decentralization process in Hungary. The critical investigation of past experiences and reform steps of the current government suggest possible reform measures to solve the financial problems of Hungarian municipalities.

László Antal, Lajos Bokros, István Csillag, László Lengyel · 5 authors

The Hungarian economy is heading towards a crisis in the late 1980s. Despite all changes, wastage of resources remains and adjustment to the market fails to emerge. The unchanged structure and errors of economic policy have led in the short term to disequilibria. Only comprehensive, radical socio-economic reform can lead the way out of the crisis, its direction being from an indirect mechanism toward decentralized market socialism. In economic policy, a turn has to be achieved, to break with earlier multiple priorities. Illusions of faster growth, maintained living standards and curbed inflation must give way to immediate structural transformation. Monetary restriction has to be applied (strict regulation of the money supply, limited availability of credit raised by the budget, autonomous central banking policy, reduction of budget subsidies, more efficient management of budget-financed institutions, etc.) A consistent programme must be drawn up to eliminate crisis industries. Large, uneconomical CMEA investment projects must be re-examined. A turn in economic policy can only be achieved by reform of the mechanism. Part of this is to diversify ownership and render it competitive (equal rank for ownership forms, transition into each other, specific harmony between self-government and share property, new regulations for foreign capital participation), and creation of a long-term interest in capital assets. Anti-monopoly measures and consistent bankruptcy procedures are needed to increase the number and autonomy of actors in the market. Tax reform must be implemented even in the short run, to eliminate ad hoc interference and secure neutrality in competition. Social reform must affect the partys role in the economy. It should be made possible for various economic policy platforms and groups to form within the party. The maker of autonomous economic policy should be a responsible, effective government. It is expedient to increase Parliaments role in creating and preserving economic constitutionalism and checking on government. Founding free representatives of interests, with truly voluntary membership, should be enabled, so that various economic interests can appear openly and conflicts be handled. Arbitration forums between interest representers and the government need to be set up. Finally, reform that points the way out of the troubles can be applied only with active social participation. It is vital for the countrys grave economic situation to be made clear to the public, and to have alternative programmes openly compete with each other.

Izabella Barati-Stec

After 1990, Hungary took steps toward decentralizing public administration and decision-making power. Administrative decentralization, however, was not matched by the same level of fiscal decentralization, creating tension and disparities among Hungarian municipalities. The revenue-raising ability of local governments in Hungary—especially after the economic downturn in 2008—is very low. The debt service of municipalities is also considerably higher than before 2008, a situation that can be explained in part by the change in the value of Hungarian forint relative to the Euro and the Swiss franc, the currencies in which half of Hungarian local debt is denominated. This situation is sharpened by unhealthy municipal financing practices, such as financing operating expenses from investment revenues or from loans. The indebtedness of the municipal sector increased 12.6 times from 2001 to 2007, and in 2007 about 83 percent of municipal borrowing was not backed by immobile assets or any revenue stream. This paper examines the system of municipal finance in Hungary with special attention to the current changes in the regulation and finance of Hungarian municipalities and the change in central control over municipal finances in general after 2008 (in part precipitated by the failure of borrowing rules created during the transitional period to prevent the current crisis in municipal finance), and suggests possible reforms to solve the financing problems of Hungarian municipalities.

Krisztián Kis, Rita Szekeresné Köteles

Based on the results of our questionnaire survey, our study presents the major operational features of LEADER LAGs established in Hungary in the second half of 2007. Our national survey indicated that most of the partnerships established do not have experience in the implementation of community-based rural development programmes and there are no traditions and practices for development cooperation, which may cause problems as the success of programme implementation highly depends on the preparedness of local society, on the cooperation of local people. The survey indicates that the development of areas covered by LAGs is hindered by so-called soft factors characterizing human resources (rural people and communities). Therefore human resources are not only factors of the rural economy but areas for development as well. Having examined the tasks of LAGs,it can be established that they deem it to be their principal task to grant support funds.Inouropinion, performance of this task is obviously necessary but far from sufficient to fulfil their catalyst role expected in local developments. For this purpose, it is essential for action groups to play a proactive role in organizing and thereby increase the capacity of local communities, a prerequisite for implementing a LEADER programme. In accordance with the basic principle of subsidiarity, rural development should be implemented locally, managed by local communities, and decisions should be made at local levels in a decentralized manner. At the same time, the survey points out that LAGs operate under strong government influence and control, leading to the conclusion that the Hungarian practice of the LEADER programme is characterized by decentralization without subsidiarity. In the present structure, the activities of LAGs are predominantly financed from central resources.Administration is the primary goal of their financing, which restricts their effective and efficient operations, thereby the successful implementation of the LEADER programme. It is unquestionable that LAGs need to be centrally financed since their operation is fundamental for programme implementation, but this requires more than acting in their present role of distributing resources. In order for action groups to fulfil their real roles to boost local developments, they need to recognize their mission; and from the financing and regulatory side, they must be enabled to complete the tasks expected from them and their function.

Krisztián Kis, Koteles Rita Szekeresne, Kiss, Krisztian, Szekeresne, Koteles Rita

A tanulmányban kérdőíves felmérésünk eredményeire támaszkodva bemutatjuk a 2007-ben megalakult LEADER HACS-ok fontosabb működési jellemzőit. Országos felmérésünkből kiderül, hogy nincsen hagyománya, gyakorlata a fejlesztésekben való együttműködésnek, holott a helyi program végrehajtása nagymértékben múlik a helyi társadalom felkészültségén, az emberek és szervezetek együttműködésén. A HACS-ok által lefedett térségek fejlődését több vonatkozásban a humán erőforrások, a vidéki emberek és közösségeik (az ún. szoft tényezők) hiányosságai gátolják, következésképpen sürgető a humán erőforrások fejlesztése is. A HACS-ok feladatuknak a támogatási források odaítélését tartják, ami fontos, de korántsem elégséges ahhoz, hogy a tőlük elvárt, a helyi vidékfejlesztési stratégiák végrehajtásában betöltendő katalizátor szerepüket ellássák. Ehhez elengedhetetlen az akciócsoportok társadalomszervező szerepvállalása, a helyi közösségek cselekvőképessége érdekében. A szubszidiaritással összhangban a vidékfejlesztést a helyi közösségek által irányítottan szükséges eldönteni és megvalósítani. A felmérés szerint a HACS-ok erős kormányzati befolyás és kontroll mellett decentralizáltan, de a szubszidiaritás híján működnek. A jelenlegi struktúrában a HACS-ok – az ellátott feladatokkal kapcsolatban felmerülő működési kiadásainak – finanszírozása nemzeti és uniós forrásokból történik, az elszámolható kiadások 100%-ának mértékéig. Az elszámolás adminisztrációja jelentős terhet ró a HACS-okra. Ahhoz, hogy az akciócsoportok betölthessék valós, helyi fejlődést katalizáló szerepüket, fel kell ismerniük küldetésüket, szabályozási és finanszírozási oldalról pedig segíteni szükséges, hogy a tőlük elvárt feladatokat ellássák. ---------------------------- Based on the results of our questionnaire survey, our study presents the major operational features of LEADER LAGs established in Hungary in 2007. Our national survey revealed that there were no traditions or practices for development cooperation, while the successful local implementation of the programme depends to a great extent on the level of preparation of the local society and on the cooperation of local people and organisations. The development of areas covered by LAGs is hindered by insufficiencies in human resources, of rural people and communities (the so-called soft factors). This makes the development of human resources an urgent task. LAGs consider their principal task to be the securing of grant funds. This is obviously necessary, but far from sufficient to fulfil their role as a catalyst in the implementation of local rural development strategies. For this purpose, it is essential for action groups to play a proactive role in organizing and thereby increase the capacity of local communities. In accordance with the basic principle of subsidiarity, rural development should be implemented locally, managed by local communities, and decisions should be made at local levels. The survey points out that LAGs operate under strong government influence and control, in a decentralized manner but without subsidiarity. In the present structure, the activities of LAGs are predominantly financed from central (national and EU) resources, covering 100 per cent of the eligible costs. Cost accounting is a significant administrative burden for LAGs. In order for action groups to fulfil their real roles to boost local development, they need to recognize their mission; also, from the financing and regulatory side, they must be given support in completing the tasks expected from them.

M Kecman

Numerous changes that have happened and are still happening in Serbia are the reason why her social and political structure is decentralizing and has to have fiscal and financial relations between the political territorial units decentralize. The new system of financing local government, which began to be applied from 1st January 2007, balanced the position of towns and municipalities.

Kadeřábková Jaroslava, Marek Jetmar

Decentralization of decision-making on the availability of essential public goods for regional and local level raises questions regardless of ability to ensure or guarantee the supply by the small municipalities. It affects the delicate problem of fiscal decentralization and own limits of decentralization process. In this paper, we deal with problems concerning primarily the development of small municipalities as independent public corporations, their ability to play the self-government role and to ensure the availability of essential public goods and services. The main criteria for defining small rural communities are the population and the status of municipality in the settlement structure, which is a predetermined by range of services provided at territory of municipality (market services, public services) to its citizens and residents of surrounding villages. We deal with problems of financing small communities, their participation in the distribution of revenue from shared taxes, the availability of other resources. We monitor the factors that enter into models of reallocation of public resources. We base their findings mot only on information from literature, but also from terrain research, which not only confirmed some previously published facts, but allowed to reveal the factors that significantly affect the financial situation of small municipalities. This led to the determination of parameters, the key mechanism for setting the allocation of public resources. On the basis of the investigation, we analyze the parameters, the key mechanism for setting the allocation of public resources. In conclusion, the authors summarize the main issues and articulate the principles that should be respected in the formulation and adjustment of the budget determination.

Snezana Hristova

This paper examines the financial crisis in light of the local economic development and sets out some policy recommendations. Local economic development is a process in which the local authorities cooperate with the public sector, business community, and NGOs, in order to create more appropriate environment for economic development and for unemployment decreasing. The last months saw the world economy facing to the worst financial crisis in history, causing unprecedented drop in demand and sales and record‐breaking unemployment levels worldwide. No country can escape certain economic and social consequences from the global financial crisis. The main research question is the following: How does the gobal crisis affect local governments? The local governements are facing several problems such as: higher unemployment and social needs at the community level, pressure for increased spending, difficulties of investment financing, need of deferring maintenance. Then, the paper sets some policy recommendations adressed to the following aspect‐ what should and can local governments do? The crisis offers some chances for change in the context of strengthening the role of local governments.The central government will rely on local governments to bring policies rapidly to bear on the economy. This could and should intensify the intergovernmentaldialogue and it could also lead to strengthening fiscal autonomy of municipalities. Improving the competitiveness at the local level and developing a strong local economy can help the country cope with the effects of the global economic slowdown. Local government units should improve their competitiveness to attract more investments and to develop their local economy. Given that the responsibility of assisting the national government in mitigating the impact of the crisis through stimulation of the local economy are given to local governments, this paper aims to discuss issues related to enhancing local economic development and fiscal decentralization as a means of improving overall service delivery in the country, in the context of global economic and financial crisis. Local governments may also be succesful in the promoting productivity locally in order to enhance the country’s competitiveness in anticipation of a greater role in global trade during the recovery in the next few years. The special focus of this paper has been given to the case of local economic development in the Republic of Macedonia.