№ 7/2017

Fìnansi Ukr. 2017 (7): 25–42https://doi.org/10.33763/finukr2017.07.025

FINANCIAL AND ECONOMIC REGULATION

OPARIN Valerij ¹, PIONTKO Nataliya ²

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-5181-4333
²SESE “The Academy of Financial Management”

The State Fund for Regional Development in the system of financial equalization

In the context of worsening imbalance in the regional development, the study of operating efficiency of the State Fund for Regional Development (SFRD), as the priority facility for financial equalization of development of the country's administrative-territorial units, is of prime importance and relevance now. The paper summarizes the theoretical foundations and investigates the practical issues of the SFRD to identify the main problematic aspects of the Fund's facility for financing regional development and improvement of approaches to increasing the innovative and investment potential of the country’s territorial units. It is found that the insignificant social and economic progress of the majority of administrative-territorial units and extension of the divergent trends of regional development are mainly due to the lack of financial resources of the Fund. Minor reasons include underfinancing of the operating activity of the State Fund for Regional Development against the legally provided volumes, an ineffective scheme for allocating the Fund's resources among regions of the country, low development of financial resources by individual regions, the insignificant share of quality projects in their total number, retention of the subjective nature related to the selection and approval of the projects. It is established that most of the projects, which have got the Fund financing, are socially-directed are targeted generally at current problems of the administrative-territorial units, without thus ensuring the economic growth of the regions. It is emphasized that the Fund provides financing for individual facilities, rather than sectors. This considerably limits overall regional development. It is proposed to increase the innovative and investment potential of the country's territorial units by increasing the efficiency of the SFRD’s financing the regional development projects and, which is of primary importance, the introduction of regional development funds at the subnational level. The need to encourage a local initiative to attract endogenous resources and develop public-private partnership as prerequisites for the formation of a financial base for regional development funds at the subnational level is highlighted.

Keywords:the State Fund for Regional Development, financial equalization, regional development projects, state regional policy.

JEL: H61, H70, H71, H74.

Oparin V. . The State Fund for Regional Development in the system of financial equalization / V. . Oparin, N. Piontko // Фінанси України. - 2017. - № 7. - C. 25-42.

Article original in Ukrainian (pp. 25 - 42)

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