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Peculiarities of the local finance systems: evidence from European countries
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com/bwdaily/dnflash/content/jun2009/db20090617_527004.htm?chan=topstory
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Vasilyeva Tetiana Anatolyevna, Ukrainian Academy of Banking of the National Bank of Ukraine Doctor of Science, Professor, Head of the Department of Banking
E-mail: tavasilyeva@ukr.net Sysoyeva Larysa Yuryevna, Ukrainian Academy of Banking of the National Bank of Ukraine Ph. D., Associate professor, Department of Banking E-mail: l.yu.sysoieva@uabs.edu.ua Vysochyna Alina Vladimirovna, Ukrainian Academy of Banking of the National Bank of Ukraine Postgraduate student, Department of Banking E-mail: av_vysochyna@meta.ua
Peculiarities of the local finance systems: evidence from European countries
Abstract: The key peculiarities of local finance system in European countries (specific features of local budget formation and directions of local budget expenditures) are analyzed in the article. On the base of this analysis the measures of local finance system transformation in Ukraine are developed.
Keywords: budget expenditures, budget revenues, local budget, local finance, local state financial independence.
Problem of the lack of financial independence of local governments in Ukraine at the present stage of the development of the national economy makes urgent the necessity of qualitative transformation of the local finances system, because it can help to gain positive results both at the local and the national levels. Thus it’s very important to analyze the peculiarities of local finance systems in different European countries and develop on its base a special measurement system that may help to solve the problem of local states’ financial independence in our country.
It’s necessary to highlight that the main characteristic, which defines the level of local government financial self-sufficiency is dependence on transfers from the central government budget to local budgets. Systems of local finance that are characterized by more than 50% level of own revenues to total revenues ratio can be considered decentralized.
Comparative analysis of the structure of total revenues of local budgets in such countries as Denmark, Italy, United Kingdom, Sweden, Slovenia, Slovakia, Czech Republic, Moldova, Lithuania, Latvia, France, Estonia, Finland, Spain, Hungary, Poland, and Romania enables us to conclude that most of the local budgets are formed mainly from its own revenues. Thus, for example, about 62% of local budget revenue in Denmark is its own revenues, in France — about 63%, in Finland — 72%, in Sweden — 80%.
Local budgets of the post-socialist countries are the most dependent on the central government. Such countries as Lithuania, Romania, Slovakia, Slovenia, have the share of transfers from central to local budget at the level about 20%, but there are initiated the transformation processes towards deepening of financial independence. However, local budgets in Albania are the most financially dependent on transfers from the central
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Section 13. Economics and management
government budget (transfers from the central government budget occurs more than 96% of local budgets total revenues) [1].
The financial autonomy of local budgets in France, Finland, and Belgium are ranging from 70 to 55%. The basis of its financial autonomy is local taxes and local premiums to national taxes. However, the autonomy of local budgets in the Nordic countries is provided mainly through the collecting of direct local taxes (property taxes, taxes on heritage etc.). For example, the direct local taxes to current income ratio is nearly 64% in Sweden, in Norway — more than 55% [2].
An important contribution to the revenue of the local budgets of the European countries provides property tax. Share of this tax in the tax revenue of local budgets is strongly varying: for example, in the UK it is 99.5%, in France and Spain — about 30-40%. It is interesting, that in most European countries Attention the implementation of this tax is obligatory because the property is the most important tax base. The main problem of the administration of this tax is fair assessment of the property value and the lack of a direct link between the value of the property and income that gets its owner.
In the Nordic countries, where the living standards are the highest, municipal income taxes play an important role in budget revenues formation: for example, in Sweden on average about 70% of total revenues is formed by this taxes, in Denmark — more than 40%, and in Norway — more than 35% [6].
Thereby, local budget revenues in European countries are dominantly formed by tax revenues and different kinds of transfers from central budget, non-tax revenues play a much smaller role in the composition of revenues. The level of non-tax revenues is ranging from 10% to 30%. Thus, non-tax revenues of local budgets in Belgian are slightly higher than 30%, in Sweden — 15%, in Norway — 14.5%, in Austria and the UK — 14%. The level of revenues from municipal property depends on its size and nature, as well as on the specifics of municipal units’ activity [3].
Development of market relations causes growing of incomes from business activity in non-tax revenues of local budgets in most post-socialist countries. The volume of this type of non-tax revenues is more than 40% in Poland, Czech Republic and Slovenia, in Bulgaria, Slovakia, Hungary — about 20%, and in Latvia and Romania — about 10%.
Share of administrative charges and fees, income from non-commercial sales, from fines and penalties in the structure of non-tax revenue of local budgets of Den-
mark, France and Spain is over 60%, in the UK — over 40%, in Sweden — over 10% [1].
Analyzing the European countries experience of local budget expenditures, it’s necessary to highlight that local budgets expenditures in different countries are somewhat similar. Typically, from the local budgets such spheres as local police, social infrastructure, programs of local importance, implementation research and development programs etc. are funded. Besides, the significant portion of expenditures is used for financing social and cultural purposes (for example, primary and secondary schools, health care etc.). Thus, In Germany, this type of expenditures is about 25% of local spending, in France — more than 33%, and in the United Kingdom — more than 40%. In Germany the costs of higher education is also covered by local budgets. The cost of funding health care sphere in such countries as Norway, Sweden, and Finland is more than 50% of local budget expenditures. Rather important section of local spending is funding of housing and communal services (sewerage, water supply, transport companies, urban landscaping, road maintenance etc.) [4].
In some there is division on current and property expenditures, so local budget revenues can be used both for the current and the investment needs. That is why all countries have current budget and development budget. Typically, the current budget is directed to cover operating costs and development budget — on capital expenditures, implementation of investment programs and so on [4].
Unlike developed European countries, Ukrainian system of local finance is based on the extensive methods of economic development, which inevitably leads to ineffective use of local budget financial capacity. In order to improve the use of local budgets in Ukraine European experience and legislation should be considered, especially in such aspects as disclosure of financial performance indicators of local state management in spending on local public services, setting of personal responsibility of local government servants for the objectivity and reliability indicators in the financial sector, the introduction of an independent audit procedures in local government and others.
Based on the research ofpeculiarities of local finance systems in European countries it can be proposed the next measures that can help to transform national local budget system: increase of fiscal role of local taxes and fees, a shift from taxation of income to taxation of property, increase of the non-tax revenues associated with the activity of the municipal government, expanding the use of municipal borrowing.
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The choice for enterprise management style of agrarian production
Besides, there should be strong linkage between local budget revenue and expenditure for different purposes, so the volume of appropriations shouldn’t exceed the financial capacity oflocal state. It’s also could be useful to expand the activity oflocal governments in financing of investment proj ects (it can be realized, for example, through public sec-
tor and business cooperation in public-private partnership).
Implementation of all these measures in Ukraine will provide the opportunity to optimize the inter-governmental relationship with regards to the specific needs of funding of social and economic development of the administrative units.
Reference:
1. Большенко С. Ф. Особливосп формування мшцевих бюджепв в Овропейських кра'шах [Електронний ресурс]/С. Ф. Большенко, Н. I. Ншгфорова. - Режим доступу: http://www.kpi.kharkov.ua/archive/Ha-уковa_перiодикa/vestnik/Технiчний%20 прогрес%20 та%20 ефектившсть%20 виробництва/2009/6/3_ Bolchenko_dr.pdf.
2. Бондаренко А. I. Вплив держави на формування мкцевих бюджепв у краша Свропи [Електронний ресурс]/А. I. Бондаренко. - Режим доступу: http://www.kbuapa.kharkov.ua/e-book/tpdu/2010-4/doc/2/13.pdf.
3. Чорна Н. Зaрубiжний досв^ формування мшцевих бюджепв та можливосп його застосування в Украш [Електронний ресурс]/Н. Чорна. - Режим доступу: http://oldconf.neasmo.org.ua/node/734.
4. Латинш М. Фiнaнсово-економiчне забезпечення функцюнування оргашв мшцевого самоврядування в Украгш/М. Лaтинiн//Публiчне управл1ння: теор1я i практика: зб. наук. праць. - Харшв, 2010. - № 1. - С. 29-35.
5. Булш Н. О. Особливосп формування та використання кошпв мiсцевих бюджетiв Украши у контекстi до-свiду зaрубiжних краш [Електронний ресурс]/Н. О. Булш. - Режим доступу: http://www.rusnauka.com/12_ KPSN_2013/Economics/3_135831.doc.htm.
6. Пггуль Н. Г. Овропейський досвiд формування доходiв мiсцевих бюджепв/Н. Г. Пшуль, I. М. Боярко,
О. В. Люта//Вшник Хмельницького нацюнального унiверситету. Сер. Економiчнi науки. - 2012. - № 5. -Т. 2. - С. 138-142.
Igebaeva Fania Abdulhakovna, candidate of philosophical sciences, assistant professor of philosophy, sociology and pedagogy, Bashkir State Agrarian University E-mail — igebaevafania @ yandex.ru
The choice for enterprise management style of agrarian production
Abstract: The article the analysis of peculiarities of different management styles. Shows the importance for a modern manager of using creative leadership style as the most perspective.
Keywords: styles of management, management principles, efficiency of management activities.
Игебаева Фания Абдулхаковна, Башкирский государственный аграрный университет, доцент кафедры философии, социологии и педагогики E-mail — igebaevafania @ yandex.ru
Выбор стиля руководства на предприятиях аграрного производства
Аннотация: В статье проведен анализ особенностей различных стилей управления. Показана важность применения современным менеджером творческого стиля руководства как наиболее перспективного.
Ключевые слова: стили руководства, принципы управления, эффективность управленческой деятельности.
Анализ управленческой деятельности в период вий успеха руководителя является необходимость обе-
формирования российского аграрного рынка позво- спечения его влияния на своих подчиненных с целью ляет сделать вывод о том, что одним из решающих усло- полной их самореализации в профессиональной сфере.
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