The USA Journals Volume 03 Issue 12-2021
42
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
MPACT
F
ACTOR
2021:
5.
952
‘
ABSTRACT
This article examines one of the main directions of improving the public administration system in the
Republic of Uzbekistan in the context of the adoption of the Conceptual document - Actions Strategy
for 2017-2021. We substantiate the objective need for a scientific analysis of the ongoing processes of
decentralization of economic systems in the Republic, first of all, from the point of view of their
possible economic and legal consequences. We reveal certain risks of fiscal decentralization in line
with organizational, legal and socio-political relationships between central government bodies and
local government bodies.
KEYWORDS
Fiscal Decentralization, Local Government, Smart Governance, Modernization Of Public
Administration, Economic Policy.
INTRODUCTION
Decentralization is not a panacea, its
possibilities are limited by the set of cultural,
historical, economic, legal and financial
difficulties that countries face. Restoring or
rebalancing the powers and functions of the
various levels of government is usually a
complex political and administrative task. The
transfer of functions to local governments
requires a significant reshuffle in political,
financial and administrative authorities. More
importantly, in some countries it represents a
significant
step
forward
towards
the
elimination of central government structures.
Fiscal Decentralization Is A Factor In The Effectiveness Of
Management
Bekzod Umarov
Senior Lecturer Department Of Business Law, Tashkent State University Of Law,, Uzbekistan
Journal
Website:
https://theamericanjou
rnals.com/index.php/ta
jpslc
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
The USA Journals Volume 03 Issue 12-2021
43
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
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F
ACTOR
2021:
5.
952
One of the problems in many developing
countries is that the central government does
not initially provide an adequate level of
services evenly throughout the country. Public
services are relatively easily accessible only to
residents of large cities, and in remote areas,
central government institutions are not
represented at all. In such cases, effective
decentralization requires access to new
financial resources in order to provide a more
equitable service to the population in all parts
of the country. Measures to ensure that local
governments fulfill their functions cannot be a
simple transfer of funds from the center,
where such resources are not available in the
first place. Under these circumstances,
decentralization would require a significant
increase in overall financial and human
resources.
Today the post-Soviet countries are faced with
the problem of improving the functioning of
their public sector of the economy. This should
guarantee a sufficiently effective provision of
public goods in relation to the growth of social
needs and the scarcity of available resources.
In theory, there are two opposite types of
response to this problem: centralization or
decentralization. Both types have advantages
and disadvantages. In Uzbekistan, after the
adoption of the Actions Strategy 2017-2021, a
course has been taken for a radical reform of
the public administration system aimed at
increasing the efficiency of the functioning of
public authorities and the gradual transfer of
their powers to the local government to
1
Ўзбекистон Республикаси Президентининг
Фармони ва унга илова
қ
илинган “2017 - 2021
йилларда
Ўзбекистон
Республикасини
ривожлантиришнинг бешта устувор йўналиши
бўйича
Ҳ
аракатлар стратегияси”. 2017 йил 7
февраль, ПФ-4947-сон // Ўзбекистон Республикаси
қ
онун
ҳ
ужжатлари тўплами, 2017 й., 6-сон, 70-
establish trusting relationships with the
population
1
.
Decentralization, involving the “engine” of
competition between local governments,
could provide better solutions to the problems
of public sector efficiency, avoiding many of
the issues associated with the growing power
of the center. In the Republic of Uzbekistan,
this problem is becoming quite urgent. Here,
since the collapse of the Soviet Union, the
national government has made many promises
to reform the finances of regional and local
government. The declaration of the reform
touched upon the problems of fiscal
decentralization, such as: introduction of the
principle of subsidiarity at the regional and
local levels, increasing budgetary provision and
expanding the financial autonomy of regional
local authorities, their fiscal capabilities. In the
long term, this could imply a departure from
the policy of dependent interregional equality
and an increase in the role of competitiveness
among regions based on the concept of fiscal
decentralization
2
.
One of the main directions of reforms in the
transition to a market economy in our country
is the gradual transition from "state to non-
state economic structures." One of the main
tasks in the formation of effective public
administration is to reduce and limit the direct
interference of the state in the economy.
Under the command-and-control system, the
political leadership oversaw and decided on all
economic issues, large and small. With the
deepening of scientific and technological
progress and the expansion of people's needs,
модда, 20-сон, 354-модда, 23-сон, 448-модда, 37-
сон, 982-модда.
2
Decentralization:
Conceptualization
and
Measurement. Aaron Schneider. Studies in
Comparative International Development, Fall 2003,
Vol. 38, No. 3, pp. 32-56.
The USA Journals Volume 03 Issue 12-2021
44
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
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ACTOR
2021:
5.
952
the complexity of social reproduction has
shown
the
incompetence
and
uncompetitiveness of the economy based on
the concept of direct government leadership
3
.
In this regard, the primary goal of reforming
the system of social and public administration
in countries that have undergone the process
of transformation is to define a fundamentally
new role of the state in the economy. In
essence, progress in this area is a key indicator
of the progress and success of administrative
reforms.
In this regard, the content of the Decree of the
President of the Republic of Uzbekistan dated
September 8, 2017 No PF-5185 "On approval of
the Concept of Administrative Reforms in the
Republic of Uzbekistan"
4
, which includes the
main directions of radical reform of public
administration, is relevant today. The concept
of administrative reform is an important policy
document that sets long-term and strategic
goals, the purpose of which is to form a
conceptually
new
model
of
public
administration.
The main content of the concept, which is
considered to be another historic document to
ensure the implementation of the Action
Strategy for the five priority areas of
development of the Republic of Uzbekistan in
2017-2021, is to radically reform the executive
branch, increase its efficiency, comply with
international requirements and standards.
aimed at creating an apparatus system.
Therefore, it provides for measures to improve
the institutional and organizational-legal
framework of the executive branch, to clarify
the tasks (functions, powers), mechanisms for
3
Barkay, T. 2009. Regulation and voluntarism: A
case study of governance in the making. Regulation
and Governance, 3: – P. 360-375.
4
Ўзбекистон Республикаси Президентиининг 2017
йил 8 сентябрда
қ
абул
қ
илинган “Ўзбекистон
their
implementation
and
areas
of
responsibility.
In addition, it is necessary to further reduce the
administrative impact on sectors of the
economy and expand market mechanisms of
governance, as well as the introduction of
modern forms of strategic planning, innovative
ideas, developments and technologies in
public administration. It is necessary to pay
special attention to the formation of a
professional civil service, measures to apply
effective mechanisms to combat corruption in
the executive branch. To successfully address
the challenges of socio-economic reforms,
Uzbekistan needs entrepreneurs who think
innovatively and are willing to invest in the
processing sector of the economy. In this
regard, it is necessary to create an appropriate
business environment that reduces the
interest in speculative models of doing
business. It is important to note here that these
conditions have a motivating character rather
than a form of prohibition or restriction.
Otherwise, it will only increase the inflow of
private capital into the underground sector.
The results of the study revealed a strong
correlation
between
the
qualitative
parameters of business development, such as
the production of innovative products and the
rate of technological renewal of the enterprise,
with its size and form of ownership. In addition,
the industrialization of the economy through
the development of large and medium-sized
industrial enterprises is becoming a key factor
in the social socialization of youth in
Uzbekistan.
Therefore,
the
next
recommendation is the need to create
Республикасида
Маъмурий
исло
ҳ
отлар
концепциясини
тасди
қ
лаш
тў
ғ
рисида”ги
Фармони билан тасди
қ
ланган Ўзбекистон
Республикасида
Маъмурий
исло
ҳ
отлар
концепцияси // Lex.uz.
The USA Journals Volume 03 Issue 12-2021
45
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
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F
ACTOR
2021:
5.
952
conditions that encourage entrepreneurs to
make long-term investments and expand the
size of their enterprises. The average
processing industry can create a demand for
skilled labor. They become the “engine” of
localization and export, as well as creating
demand for products and services of small
business
and
private
entrepreneurship.
Accordingly, this will have a positive impact on
the growth of employment in this sector and
the expansion of the share of middle class in
general.
Taking into account the demographic
development trends of Uzbekistan, it is
necessary to gradually increase the number of
small businesses and private entrepreneurship
by 2-3 times each year, so that by 2030 there
will be at least 30-40 enterprises per 1,000
people. In order to accelerate the development
of
the
small
business
and
private
entrepreneurship sector and its qualitative
growth, the measures taken by the
government in this area must meet a single but
fundamentally important condition, namely,
administrative (financial, pricing, fiscal, etc.)
means of regulating economic activity should
be reduced
5
. The gradual transition to the use
of real market instruments of economic
regulation will allow the entrepreneurial
movement to acquire a "mass character". This
approach will help to "rejuvenate" the average
age of entrepreneurs in our country. To this
end, the government should focus on
addressing the following issues in the medium
term. The study showed that the main factors
hindering the legalization of business and its
qualitative development are most pronounced
5
Börzel, T.A. 2010b. European Governance -
Negotiation and Competition in the Shadow of
Hierarchy. Journal of Common Market Studies, 48
(2): – P.191-219.
6
“Модернизация,
исло
ҳ
отлар
ва
трансформацияларни
тезлаштиришга
in the administrative regulatory norms set
within the framework of fiscal and monetary
policy. In this regard, developing and taking
measures to eliminate the gap between cash
and non-cash money while maintaining
macroeconomic stability and without setting
additional rules governing the use of private
sector funds is crucial. Also abandonment of
inefficient soft loans (reduction of the number
of benefits on the list of enterprises and
introduction of the use of network benefits),
development of interest rate policy of banks in
the new conditions is needed
6
.
Improvement and take measures to develop a
competitive environment in the banking sector
and to establish non-bank lending institutions
with relatively simple collateral requirements
and other conditions. It is necessary to
continue targeted work to reduce the tax
burden on small business and private
entrepreneurship (reduction of the tax rate on
the salary fund, abolition of the basic amount
of the single tax payment and the minimum
number of employees of the enterprise and the
salary fund).
In the field of economic regulation, the state
needs to change its approach so that the most
important decisions are made in more
consultation. The business should not only be
aware of future changes, but also participate in
the development of the established norms.
When the government and business make joint
decisions, this process becomes part of the
new public contract, and the norms introduced
become the most effective norms in terms of
social reform and economic development of
кўмаклашиш” 2014 йил (SMART) UNDP Country
Office in Uzbekistan http://www.uz.undp.org.
(Promoting Accelerated Modernization, Reform
and Transformation” 2014(SMART) UNDP Country
Office in Uzbekistan http://www.uz.undp.org.)
The USA Journals Volume 03 Issue 12-2021
46
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
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the country
7
. Reducing the level of transaction
costs in the economy and creating conditions
that encourage the expansion of small
businesses and the creation of medium-sized
enterprises will strengthen the capacity of the
private sector to fulfill its social responsibility.
Without effective mechanisms for the
interaction
of
government,
population,
business and civil society, it is impossible to
create
favorable
conditions
for
the
development of the private sector. Therefore,
increasing the role of entrepreneurs in socio-
political processes is an important strategic
direction in the development of small business
and private entrepreneurship in general. It is
important
to
develop
institutional
mechanisms. Such mechanisms would have
shaped individual qualities in entrepreneurs,
and especially young people, that enable them
to think innovatively in the new environment,
to move from the traditional collective to
individual approach to behavior, and to feel
their personal responsibility for their future
and the successful development of the
country. To do this, the state must actively
involve public organizations and parties in
important
government
decision-making
processes in the field of economic regulation
8
.
This approach helps entrepreneurs develop a
stronger civic outlook, as well as the skills to
collectively defend their interests. The work
being done today in Uzbekistan to introduce a
system of legislative impact assessment at the
institutional level can be a force to accelerate
such processes. This is explained by the fact
7
Dafflon, Bernard. 2006. “The Assignment of
Functions to Decentralized Government:From
Theory to Practice.” In Handbook on Federalism,
edited by Ahmad Ehtisham and Giorgio Brosio.
Cheltenham, U.K.: Edward Elgar.
8
Bardhan, Pranab. The Role of Governance in
Economic Development: A Political Economy
Approach, The Organisation for Economic Co-
that public consultations by the executive
authorities on all issues of economic regulation
and the mandatory publication of their results
is one of its main features that ensure the
quality of the legislative impact assessment
system
9
.
The efficiency of the measures taken to
improve
the
business
environment
is
objectively
reflected
in
the
positive
assessments of leading international financial
institutions and rating agencies. According to
the World Bank's Doing Business 2020 report,
Uzbekistan is among the top 20 reformers in
the world in terms of creating a more favorable
environment for entrepreneurship, moving up
seven places to 69th place in the overall
ranking
10
. This indicator is an example of the
work carried out in 2019 in accordance with the
State Program on targeted improvement of
the 10 key criteria for improving the business
environment set by the World Bank.
In accordance with the Actions Strategy for the
five priority areas of development of the
Republic of Uzbekistan in 2017-2021, the
country is implementing comprehensive
institutional and structural reforms aimed at
reducing state participation in the economy,
protecting the rights of business entities,
further strengthening the priority of private
property.
Decree of the President of the Republic of
Uzbekistan No. PF-5409 of April 11, 2018 "On
measures to further reduce and simplify
operation
and
Development,
Paris:
OECD
Publications, 1997.
9
Regulating advice Markets. Definition of the term
“fiduciary” conflicts of interest - retirement
investment advice. Regulatory impact analysis for
final rule and exemptions. 2016. – P. 11-12/
10
https://www.doingbusiness.org/content/dam/doin
gBusiness/country/u/uzbekistan/
The USA Journals Volume 03 Issue 12-2021
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The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
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licensing and permitting procedures in the field
of entrepreneurship, as well as to improve the
business environment" served as a logical
continuation. This Decree stipulates the
following
11
:
First, 42 licensing and permitting procedures
were abolished. These include licenses for the
sale of petroleum products through refineries
and oil change points, permits to act as a
customs broker, outdoor advertising, etc .;
Secondly, 38 licensing and permitting
procedures merged into 17;
Thirdly, the duration of 25 types of licensing
and permitting procedures was reduced by
reducing the time of their internal registration;
Fourthly, the functions of the licensing
authority for 9 types of licenses will be
transferred from the Cabinet of Ministers to
the relevant state bodies. 5 types of licensing
and permitting procedures will be transferred
from public administration bodies of the
republic to their territorial departments;
Fifthly, measures are planned to further reduce
and
simplify
licensing
and
permitting
procedures. For example, from June 1:
reduction of the number of documents
submitted for the design, construction,
operation
and
maintenance
of
telecommunications
networks,
obtaining
licenses and permits for professional activities
in the securities market, appraisal, veterinary
and tourism activities;
the license requirement for the mandatory
amount of the charter capital of the realtor
organization is abolished, allowing the
11
provision of real estate services without
advance payment;
granting the right to individuals who own cars
to
carry
out
commercial
passenger
transportation in the form of a linear taxi as an
individual entrepreneur;
granting individual entrepreneurs the right to
obtain a permit for mobile trade, valid for a
period not exceeding 12 months (a single
permit gives the right to conduct mobile trade
in several places);
Sixth, all licenses, except for licenses related to
the circulation of narcotic drugs, psychotropic
substances and precursors, as well as the
distribution of radiotelephone (cellular)
communications and television and radio
broadcasting, shall be issued for an indefinite
period of time;
Seventh, if the licensing authority does not
decide to grant or refuse to grant a license
during the period of consideration of the
application for a license, it can be stated that
after the expiration of this period, the plaintiff
has the right to carry out the type of activity
specified in the application.
Dramatically reducing the number of licenses
and permits, reducing the list of required
documents,
simplifying
administrative
procedures and increasing their transparency
by optimizing the timing and value of
administrative procedures, conduct surveys in
the target audience, implementing best
international practices in this area. The process
of studying, consulting with the business
community and analyzing their impact on the
competitive environment on the basis of the
involvement of leading international experts is
still being carried out in a dynamic manner.
The USA Journals Volume 03 Issue 12-2021
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The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
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It should be noted that the first results of the
reforms implemented in the framework of the
Action Strategy for the liberalization of public
administration and the transition to a market
economy in our country show positive changes
in international rankings, which constantly
analyze the process of effective economic
governance.
In particular, our country has risen from 152nd
to 140th place in the ranking of
"2019 Index of
Economic Freedom"
- the index of economic
freedoms. This was achieved, in particular, as a
result of measures aimed at reducing the tax
burden, "improving" fiscal policy and ensuring
freedom of trade
12
.
In conclusion, one of the priorities of the
concept of administrative reform is the
modernization of economic sectors and the
social sphere, the introduction of modern
management methods aimed at overcoming
the problems and shortcomings that hinder
the successful implementation of public policy
to limit unwarranted and harmful state
intervention in the economy. is to reach. First
of all, the optimization, decentralization of
regulatory functions of public administration
and the introduction of effective management
based on the laws of a market economy
("Smart regulation") in the implementation of
fiscal and economic policy in the country are
yielding positive results.
It is also important to further reduce the
administrative impact on the economy and
expand market mechanisms of governance, to
develop a healthy competitive environment in
the most important sectors of the economy
and social spheres, to ensure the full
functioning of organizational and legal
12
T.Miller, A.B.Kim, J.M. Roberts. Index of Economic
Freedom. – Washington, DC: The Heritage
Foundation, 2019.
mechanisms to eliminate conflicts of interest.
At the same time, based on the tasks of the
positive influence of the state in these
processes, optimizing the activities of entities
engaged in the management of certain sectors
of the economy, the transfer of state property
on these principles would serve to achieve
transparency and competition in the private
sector.
In addition, one of the most important practical
steps is to abandon the practice of financing
the executive branch of government at the
expense of economic management bodies
under their control creates conditions for
growth. Most importantly, these measures are
aimed at ensuring the rule of law in society, the
formation of a system that protects the rights
and interests of citizens of our country and
foreign investors, allows them to engage in
effective business activities.
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Ўзбекистон
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Президентининг Фармони ва унга илова
қ
илинган
“2017
-
2021
йилларда
Ўзбекистон
Республикасини
ривожлантиришнинг
бешта
устувор
йўналиши
бўйича
Ҳ
аракатлар
стратегияси”. 2017 йил 7 февраль, ПФ-
4947-сон // Ўзбекистон Республикаси
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онун
ҳ
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Barkay,
T.
2009.
Regulation
and
voluntarism: A case study of governance in
The USA Journals Volume 03 Issue 12-2021
49
The American Journal of Political Science Law and Criminology
(ISSN
–
2693-0803)
Published:
December 21, 2021 |
Pages:
42-49
Doi:
https://doi.org/10.37547/tajpslc/Volume03Issue12-07
I
MPACT
F
ACTOR
2021:
5.
952
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қ
абул
қ
илинган
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ҳ
отлар
концепциясини тасди
қ
лаш тў
ғ
рисида”ги
Фармони
билан
тасди
қ
ланган
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исло
ҳ
отлар концепцияси // Lex.uz.
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исло
ҳ
отлар
ва
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тезлаштиришга
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Country
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in
Uzbekistan
http://www.uz.undp.org.
(Promoting
Accelerated Modernization, Reform and
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2014(SMART)
UNDP
Country
Office
in
Uzbekistan
http://www.uz.undp.org.)
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Dafflon, Bernard. 2006. “The Assignment
of
Functions
to
Decentralized
Government:From Theory to Practice.” In
Handbook on Federalism, edited by Ahmad
Ehtisham and Giorgio Brosio. Cheltenham,
U.K.: Edward Elgar.
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Bardhan, Pranab. The Role of Governance
in Economic Development: A Political
Economy Approach, The Organisation for
Economic Co-operation and Development,
Paris: OECD Publications, 1997.
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Regulating advice Markets. Definition of
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https://www.doingbusiness.org/content/d
am/doingBusiness/country/u/uzbekistan/
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