DECENTRALIZATION OF FINANCIAL RELATIONS AS A PREREQUISITE FOR THE SOCIO-ECONOMIC DEVELOPMENT OF REGIONS

Abstract

This article provides a comprehensive theoretical analysis of the conceptual foundations underlying the decentralization of financial relations. The research focuses on the academic substantiation of decentralization processes and the subsequent formation of qualitatively new financial interactions between diverse stakeholders. A central part of the study involves the identification and detailed characterization of three fundamental pillars of decentralization: responsibility, efficiency, and subsidiarity.
The authors argue that responsibility within this framework reflects a profound commitment by government entities to implement the vital interests of society. Efficiency is interpreted as the strategic optimization of results, characterized by achieving objectives through the rational saving of social labor and resources. Furthermore, subsidiarity is positioned as a safeguard for individual autonomy and the inherent right to self-governance for local communities and territorial units. The study establishes that these characteristics serve as the bedrock for forming autonomous financial relations at the regional level, ensuring the creation of a distinct regional financial space necessary for sustainable socio-economic development.
By utilizing these structural elements, decentralization achieves its ultimate goal: the establishment of a robust financial environment that fosters regional growth. Finally, the authors assert that fiscal decentralization generates numerous positive externalities, including the stimulation of efficient resource management, the attraction of investment through a favorable business climate, and the enhancement of public service quality. These factors collectively strengthen local government accountability and promote a resilient economic framework.