Тезисы докладов республиканской электронной конференции
«ПРОБЛЕМЫ И ПУТИ ТРАНСФОРМАЦИИ НАЦИОНАЛЬНЫХ ЭКОНОМИК: НОВЫЕ
ВЫЗОВЫ ИНВЕСТИЦИОННО-ИННОВАЦИОННОГО ПРОРЫВА»
83
Nozim G. MUMINOV
Associate Professor of the
Department "Economic Theory"
National University of Uzbekistan
named after Mirzo Ulugbek
PROBLEMS OF DECENTRALIZATION OF BUDGET FUNDS IN THE
REVENUE PART OF THE LOCAL BUDGET
The problem of financial resources and powers decentralization is
attracted a lot of scientific researches, but none of them revealed the
criterion for determining the optimal level of centralization or
decentralization of budget funds in the revenue part of the local budget. To
answer the question, what is better: fiscal centralization or decentralization,
the theory of fiscal federalism is intended. Fiscal federalism is one of the
main objects of research in the public sector of economy and reflects a
complex pattern of relations between budgets of different levels.
A critical analysis of the definition of the "decentralization" term in the
writings of many economists, proves that decentralization is a complex of
phenomena, the components of which different scientists define differently.
But, despite different views on the definition of the notion of
decentralization, it is fundamental to define it in the light of the
interrelationships between central and subnational (local) governments
about their various powers (fiscal, political, administrative, etc.) given by the
American scientist Michael Bell. Decentralization, according to Bell, is a
way of measuring the magnitude of the transition of a national economy
from command to market economy. The beginning of decentralization
through the prism of various kinds of powers is that these powers must
have their own dimension and goals.
Under the budget decentralization should be understood any type of
mobilization of financial resources in the budgets of local governments. In
addition to its specific content, it should be considered as a way to measure
the size of the transition of the national economy from command to market
economy and which is expedient provided that a reasonable optimum is
reached between the formation of local budget revenues and the financing
of delegated powers.
Analyzing the financial policy of Uzbekistan for the years of
independence, it is impossible not to notice its areas of fiscal
decentralization. Recently, all developing countries and countries with
economies in transition have been implementing their policies towards
fiscal decentralization in order to change the ratio of the impact of central
government and local governments on the macroeconomic situation.
Тезисы докладов республиканской электронной конференции
«ПРОБЛЕМЫ И ПУТИ ТРАНСФОРМАЦИИ НАЦИОНАЛЬНЫХ ЭКОНОМИК: НОВЫЕ
ВЫЗОВЫ ИНВЕСТИЦИОННО-ИННОВАЦИОННОГО ПРОРЫВА»
84
Budget decentralization is classified according to the typology of a
specific economic model: delegation, devolution, and decentralization.
Provisions on the delegation of powers of state authorities to local
governments provide for the transfer of certain powers to perform local
government on behalf of the central government, and funding for tasks
performed within delegated powers is provided by the state through the
allocation of transfers. Delegation takes place in any state of the country's
economic development, but prevails in countries with an administrative-
command model of the economy, where a high level of concentration of
financial resources is in the state budget, and, moreover, it provides for the
absence of budgetary self-financing of local governments budget when
financing delegated authority.
Devolution
is
an
intermediate
link
from
centralization
to
decentralization, characteristic of the transition period, when local
governments finance are responsible for the provision of certain public
services within the framework of such financing from the state budget. As a
rule, it concerns the satisfaction of social needs. And decentralization itself
implies a concentration of financial resources at the level of local
governments for financing by them (bodies) of delegated powers. In
addition, special services or bodies should be created in the regions where
citizens are involved before government decisions are taken.
In Uzbekistan, representative bodies of local self-government have
the same competence
— village, town, city councils and have elected
village, town, or city mayors. In economically developed countries, in
addition to representative bodies, a widely developed structure of non-party
organizations that are actively involved in the management of a particular
territory and can influence the adoption or cancellation of certain decisions
of representative bodies by interviewing citizens, protest actions,
demonstrations, rallies and the like. Decentralization is typical for countries
with developed market economies.
Devolution in different countries goes differently for a long time,
depending on the economic development, political and cultural preferences
of a particular country. But the result of the policy of devolution is the
centralization or decentralization of financial resources in the central or
local budgets.
The traditional theory of fiscal federalism makes recommendations for
assigning certain functions and fiscal instruments necessary for their
implementation to different levels of government. The cornerstone of the
theory of fiscal federalism is the decentralization theorem: if
decentralization does not affect the level of spending, then decision-making
on a local public div is more effective than centralization, or at least not
inferior to it in terms of efficiency. Centralization and the standardization
connected with it very often allow not only to reduce administrative
Тезисы докладов республиканской электронной конференции
«ПРОБЛЕМЫ И ПУТИ ТРАНСФОРМАЦИИ НАЦИОНАЛЬНЫХ ЭКОНОМИК: НОВЫЕ
ВЫЗОВЫ ИНВЕСТИЦИОННО-ИННОВАЦИОННОГО ПРОРЫВА»
85
expenses, but also to reduce the price directly for the production of a unit of
public benefit. Decentralization of the public sector is appropriate when it
contributes to the effective performance of its functions. In economic
theory, it is customary to consider local and national public goods, the
production of which is one of the main functions of the state. Naturally, in
the production of national goods fiscal decentralization will lead to a
decrease in the economic efficiency of such measures. The provision of
public goods at the local level is more effective when independent
decisions are made by local and regional governments.
The relationship between the level of fiscal decentralization and the
economic boom economists in different countries have been actively
exploring since the mid-1970s. However, as early as the 1950s, English
economists Martin and Lewis noticed that "... the weakness of local
governments in relations with central ones is one of the most noticeable
phenomena for developing countries ...". Studies of John Mixes and Mark
Sandberg, conducted in the mid-80s, fully confirm the findings of Martin
and Lewis. In 20 industrialized countries, the share of central government
spending in gross national expenditures is 65%, while in 23 developing
countries it is 89%. Similar results were given by other studies. However,
this does not at all mean that an increase in the level of fiscal
decentralization will automatically lead to an increase in the rate of
economic recovery and an improvement in the welfare of the nation. On the
contrary, many economists believe that fiscal decentralization of public
finances is more a consequence, not a cause, of economic growth.
When pursuing a policy of fiscal decentralization or centralization,
one should take into account numerous factors of economic development,
among which the peculiarities of the state political system and the
historically established interrelations between its various links play a
significant role. Strengthening the financial independence of local
governments is an urgent task of the policy of decentralization of public
finances in Uzbekistan. Self-governing levels of the economy must have
normal conditions for economic activity and be in the effective use of all
types of resources, and local authorities in a stable economic growth.
Local councils in the context of a new policy devolution should
independently determine the direction of the use of funds from their
budgets. The disadvantage is that the legislation does not establish a
specific list of expenses that must be financed from local budgets. In this
regard, it is impossible to determine how secured to local budgets revenues
provide for the needs and in what amounts.
The weakening of the central government and at the same time the
growing role of local governments in developing countries and in countries
with transitional economies is a characteristic feature of the last decade of
the 20th century. At the same time, evidence of the fact that fiscal
Тезисы докладов республиканской электронной конференции
«ПРОБЛЕМЫ И ПУТИ ТРАНСФОРМАЦИИ НАЦИОНАЛЬНЫХ ЭКОНОМИК: НОВЫЕ
ВЫЗОВЫ ИНВЕСТИЦИОННО-ИННОВАЦИОННОГО ПРОРЫВА»
86
decentralization in these countries really contributes to economic recovery
is practically absent in both domestic and world economic literature.
