Abstract
It is a problem of a financial decentralization mechanism modelling to be considered in the paper. It introduces a methodical approach to the construction of models of financial decentralization assessment and analysis complex, that, basing on the methods of factor, canonical analysis, cluster analysis, development level method, Kohonen neural networks, panel data models, allows to create diagnostic classes of the financial decentralization level, choose an «etalon» model of development and assess the impact of the financial decentralization level on indicators of socio-economic development of territories. The methodological approach proposed includes the following stages: classification of countries according to the level of socio-economic development and competitiveness, the formation of a comparable research base; the formation of an indicators system and diagnostic classes of the level of financial decentralization; development of models for assessing the impact of financial decentralization on socio-economic indicators of territories development. To build a set of models Statistica, R, Deductor Studio, EViews were used. The simulation results showed that a high level of financial decentralization is typical for countries with high level of economic development, where there is a high quality of the institutional environment and administrative decentralization, this leads to increase in the efficiency of the public sector operation and economic growth as consequence. Income decentralization is bounded to a stronger effect on economic growth than expenditure decentralization. The result of the strengthening of federalism aligning and tax autonomy is a slowdown in economic growth. Meanwhile, the negative effect of tax autonomy is stronger than the effect of aligning federalism. There is a gap between the growth rates of income and expenditure powers of budgets of different levels and the GDP growth rates in countries with a high level of competitiveness and socio-economic development, that reduces the level of fiscal and debt security. Therefore, a promising area of research is assessing the systemic risk of financial policy and stability of the financial system to the impact of external «shocks»
Highlights
In the context of increasing financial systems instability that is associated with globalization processes and appearance of new specific threats, the improvement of financial management systems at various levels of the hierarchy is of the particular importance, aimed to control risks, form of financial support for sustainable economic growth and early warning of crisis and catastrophic socio-economic situations
It worth to note that along with the positive effects of financial decentralization, which are manifested in time reduce of decision-making regarding the strategies of socio-economic development of regions that meet the expectations of society; openness and transparency of decision-making procedures; increasing initiatively and responsibility for decision-making, fiscal federalism carries certain risks
The analysis results of the relationship between the level of financial decentralization and indicators of socio-economic development of the territories allow to draw the following conclusions: the high level of financial decentralization is mainly inherent to the countries with high level of economic development and economic density
Summary
In the context of increasing financial systems instability that is associated with globalization processes and appearance of new specific threats, the improvement of financial management systems at various levels of the hierarchy (including state and regional) is of the particular importance, aimed to control risks, form of financial support for sustainable economic growth and early warning of crisis and catastrophic socio-economic situations. It worth to note that along with the positive effects of financial decentralization, which are manifested in time reduce of decision-making regarding the strategies of socio-economic development of regions that meet the expectations of society; openness and transparency of decision-making procedures; increasing initiatively and responsibility for decision-making, fiscal federalism carries certain risks. Such risks include autonomization and confrontation of goals of socio-economic development of individual territorial entities and the state as a whole; disintegration of activity that is related to the provision of public services; coordination difficulties; increased risks of decision-making, etc. The relevant direction of the study is the development of models for assessing the impact of financial decentralization on the indicators of socio-economic development of territories
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