soxumis saxelmwifo universiteti

104MARINA TABATADZEFINANCIAL ELEMENTS OF SELF-GOVERNMENTS’DEVELOPMENT STRATEGYThe State and municipal programs play significant role in the developmentof regional economics. The aim of these programs is to createjuridical and institutional basis for competitive business environment andto help the local authorities in autonomous performance. Local authoritiesare generally characterized by a weak control on public expenses fromthe central government and also little flexibility in distributing financialresources. As they are also characterized by different conditions of social-economicdevelopment, the State is responsible for leveling these differencesby correct financial support. An important issue for this is to optimizemoney transfer policies. It is necessary to balance the deficit betweendifferent municipalities - provoked by transferring incomes betweenbudgets - by using equivalence transfers controlled by the central government.To achieve this, governments use so called “supporting individualcoefficient”. The main factor for fulfill the transfer policies it to developdifferentiated inter-budgetary relation. As for establishing rationalfiscal policies, it is necessary to mark off budget authorities and pass onpurposed-programmed financing for all level budgets. This should reflectreal connection between the country’s economic development and thebudget planning. This will increase the responsibility of each element inmanaging financial flows and using them efficiently. Transfer policiesshould take into account the State’s priorities, ensure necessary environmentfor developing local business and provide them by essential recourses.It is advisable to replace the practice of supporting the regions by financialaids directly from the State budget, by sponsoring the essentialprograms of management. This approach serves in developing regions ingeneral, and decreasing their dependence on the central government, atthe same time. Nevertheless, to determine the correct amount of transfers,it is necessary to improve, first, the tools of administrating incomes in localbudgets and second – study the directions of their mobilization. Stimulatingthe development of local businesses should decrease the dependenceof local authorities on the State budget. This will help in their autonomousoperation.Budget systems include determining regional development regulations,establishing spatial proportions of economies and forecasting the directionsof their development. These are reflected in purposed programsthat are responsible for protecting the interest of economic elements, orientedon revenue, and protecting the State’s regional goals.