DETERMINANTS OF BUDGET REGULATION OF TERRITORIAL COMMUNITIES’ SOCIO-ECONOMIC DEVELOPMENT IN CONDITIONS OF A NEW REGIONAL DEVELOPMENT POLICY IMPLEMENTATION

Abstract

The growing socio-economic differentiation proves the impossibility to use the unified approach to regulating the development of territorial communities in the framework of implementing the public regional policy. The paper argues that fostering the balanced territorial development through the polycentric network of the development of territorial communities in terms of integrated investment requires the rethinking of regional development policy from the concentration on the solution of territorial communities’ and territories’ problems to the application of the differentiated approach to their socio-economic development. Global megatrends related to demographic (falling population and ageing of population) and technological (digitalization and automation) changes, as well as changing environment (pollution, loss of biodiversity, and climate change), are systematized. The paper proves that these global megatrends need to be considered in the management of public investment and maintenance of efficient management. Boosting the endogenous capacity and spatial inclusivity of territorial communities in conditions of a new regional development policy stipulates the consideration of the level of interactions between territorial communities (growth poles and periphery) and the level of positive momentums generation and their absorption. The paper determines that the configuration of the center-periphery interactions in the region from the viewpoint of the multi-level hierarchy across relevant sections (economic, social, spatial) contributes to the development of the necessary set of budget tools to implement the regional development policy. The paper argues that the use of a differentiated approach to the development of territorial communities requires the harmonization of the objectives provided by the State Regional Development Strategy and local strategies, maintenance of equal participation of territorial communities in the measures of budget stimulation of regional development, transformation of communities stimulation mechanism through the State Regional Development Fund, and development of local programs directed at activation of endogenous financial-economic capacity. A wide range of tools to stimulate the development of territorial communities is suggested, including the target investment in human capital, infrastructural investment, business support development, research and innovation support, coordination of actions between non-governmental entities.