Fedorenko, T.
(2024).
Tools for financing local economic development of local communities.
Economic Forum,
14(1),
62-74.
https://doi.org/10.62763/cb/1.2024.62
Received 17.08.2023, Revised 05.11.2023, Accepted 28.12.2023
The study examined the specific features of using the instruments of financing the economic development of territorial communities on the example of Ukraine. Economic and statistical analysis methods were used to process the data, including the Wilcoxon signed-rank test for comparing growth trends. The study identified the most common sources and tools for financing the economic development of local communities, in particular tax revenues, grants, loans, public-private partnerships. The financial instruments of local economic development in the UK, Denmark, and Slovenia were analysed, focusing on their flexibility, adaptability, and efficiency. The importance of integrating the best practices of these countries into the strategic financial management of territorial communities of Ukraine is substantiated. Specific recommendations for implementing successful international experience are proposed. It is recommended that Ukraine introduce monitoring and control systems similar to the British ones to ensure strict control over local budget expenditures, which is important for the stability and transparency of financial governance; consolidate or redistribute competencies in favour of larger communities, increase the share of local taxes, and introduce financial equalisation mechanisms to reduce financial inequality and ensure equal opportunities for all communities, as the Danish experience has shown. According to the Slovenian experience, it is necessary to develop clear standards for the provision of services, create independent supervisory authorities to monitor the effectiveness of local budgets, introduce fiscal decentralisation, and increase the share of local taxes to increase the autonomy of local authorities and reduce the disparity in the level of services between regions. The results obtained emphasised the importance of using an integrated and integrative approach to the development and management of financing tools for the local economic development of territorial communities. The practical significance of the study’s findings is manifested in the provision of specific recommendations on the use of various financing instruments, such as local guarantees, municipal bonds, and loans from international financial institutions and grants from international donors. These recommendations can help determine investment priorities and improve investment planning and management processes, which is important for the development of territorial communities
regional public administration; tax revenues; grants; subventions and subsidies; public-private partnership; state budget; local budget
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