Critical Analysis of Methodological Approaches to a Political Subdivision Financial Potential Assessment

• Main Author: I. Hrynaschuk
• Format: Article
• Language: English
• Published: LLC "CPC "Business Perspectives" 2010-03-01
• Series: Економіка розвитку
• Subjects: strategy; management; region; economic system.
• Online Access: http://www.ed.ksue.edu.ua/ER/knt/e101_53/e101gryn.pdf

Nowadays, under the conditions of limited financial resources for guaranteeing execution of functions and authority by local administration, the vital need is to search alternative sources of filling local budgets. One of such sources is activation of development of a political subdivision financial potential. An important condition for realization of this task is to work out an integrated methodological approach to its assessment.At present there are many theoretical and methodological elaborations regarding the assessment of financial potential at macrolevel.Some approaches to its assessment are elucidated in scientific works by N. Kolesnykova, O. Komelina, L. Tuhai, I. Chunytska, S. Shumska etc.The analysis of existing approaches to assessment of a political subdivision financial potential has allowed to determine its structural components, notably: the aggregate of financial resources of a political subdivision, the facilities of economic agent (local administration, subject of entrepreneurial activity or households) to provide its development and synergetic effect of interaction between two first elements. Obviously, to assess such an effect it is essential to answer the following questions: "How many resources are there?" and "To what extent is it possible to use them?".The assessment of the aggregate of political subdivision financial resources gives the quantitative characteristic of its financial potential, which is conducted with the usage of formal analytical information. The determination of economic agents' facilities concerning the territory development provides its qualitative characteristic as it points out not only the economic facilities of the subjects of entrepreneurial activity or households, but also its willingness, interest, initiative in acting on the way of the territory's economic growth. The methodological basis for assessing qualitative characteristics of a political subdivision financial potential is methods of sociological research.