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.
Highlights
The present stage of the world economy development is characterized by significant regional disparities, a high level of polarization of economic development
The initial system of indicators was formed on the basis of the analysis of literary sources devoted to the problem of assessing the level of socio-economic development and competitiveness of territories
Among all EU countries, the Czech Republic, Spain, Italy, and Sweden are the closest ones to the coordinates of the “pattern point”
Summary
The present stage of the world economy development is characterized by significant regional disparities, a high level of polarization of economic development. As of 2018, 36 countries (18% of the total number of countries) accounted for 60% of world GDP and 18% of the population. The remaining 159 countries (82%) accounted for respectively 40% of world GDP and 82% of the population (OECD, 2018). These proportions of economic development polarization are reproduced both at the level of individual countries and regions. The gap in the per capita GDP levels of states with high and low levels of development increased from 74 times in 1961 to 1048 times in the pre-crisis 2008 (WORLDBANK, 2018)
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