Problemi Ekonomiki (Mar 2019)
Financial Mechanisms of State Support for the Socio-Economic Development of United Territorial Communities in the Context of Decentralization
Abstract
Public funds are a significant source of external financing for united territorial communities (UTCs). However, numerous risks are inherent in the mechanisms of state support for the socio-economic development of territorial communities. The aim of the article is to identify ways to improve financial mechanisms of state support for the socio-economic development of united territorial communities based on an analysis of their functioning at the first stage of decentralization. There described the main mechanisms of state financial support for the socio-economic development of united territorial communities at the first stage of decentralization (2015–2017): subvention for implementing measures for the socio-economic development of individual territories, subvention for building the infrastructure of united territorial communities and resources of the State Fund for Regional Development. The volumes of the amounts allocated to and used in united territorial communities of the Carpathian region are analyzed. The need for providing state financial support for the created UTOs at the initial stage of their activity is proved. There revealed deficiencies in the functioning of mechanisms of state financial support for the socio-economic development of UTOs: dominance of social projects over economic ones; imperfection of the formula for the distribution of subvention for forming the infrastructure of united territorial communities; the non-transparent mechanism for distribution of subvention for implementing measures aimed at the socio-economic development of individual territories; low level of co-financing of projects from local budgets, etc. The article justifies the need for increasing the number of economic projects in UTCs; attracting funds of private investors to projects financed from the state budget; toughening the requirements for design documentation submitted to the State Fund for Regional Development. The attention is focused on the expediency of a gradual transition from the provision of united territorial communities with ready financial resources from the state budget to the creation of conditions for stimulating the communities to increase their investment attractiveness.
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