Received: 2019-01-10  |  Accepted: 2019-09-16  |  Published: 2019-12-15

Title

Strengthening financial decentralization: driver or risk factor for sustainable socio-economic development of territories?


Abstract

The article deals with the problem of modeling the effectiveness of the development of financial decentralization mechanisms. A conceptual approach is proposed, which allows to form a complex of models. The models allow to evaluate the socio-economic effects of financial decentralization increase; to determine the “threshold” value of the level of financial decentralization, upon which slowdown in economic growth may occur. The models are based on based on the principal components’ method, canonical correlations, cluster analysis, Kohonen neural networks, the level of development method, production and institutional functions. The modeling results showed that a high level of financial decentralization is inherent to countries with a high level of economic development, where high quality institutional environment and administrative decentralization lead to the increase of the efficiency of the public sector functioning. At the same time, in countries with a high level of competitiveness and socio-economic development the gap between the growth rates of income and expenditure powers of budgets of various levels and the growth rate of GDP is growing. This fact reduces the level of budget and debt security. Models of production and institutional functions have been developed, countries with a “reference” development model have been identified, as well as groups of countries that would have a higher effect from the re-centralization of government finances or financial decentralization.


Keywords

financial decentralization, efficiency, modeling, multidimensional analysis, production and institutional functions


JEL classifications

C54 , H70 , R50


URI

http://jssidoi.org/jesi/article/409


DOI


Pages

875-890


Funding


This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Fabuš, Michal
School of Economics and Management of Public Administration in Bratislava, Bratislava, Slovakia https://www.vsemvs.sk
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Dubrovina, Nadiya
School of Economics and Management of Public Administration in Bratislava, Bratislava, Slovakia https://www.vsemvs.sk
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Guryanova, Lidiya
Simon Kuznets Kharkiv National University of Economics, Kharkiv, Ukraine https://www.hneu.edu.ua
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Chernova, Natalia
Simon Kuznets Kharkiv National University of Economics, Kharkiv, Ukraine https://www.hneu.edu.ua
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Zyma, Olexandr
Simon Kuznets Kharkiv National University of Economics, Kharkiv, Ukraine https://www.hneu.edu.ua
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Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

2


Issue date

December 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 1218  |  PDF downloads: 528

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