In the conditions of modern challenges, the issues of infrastructure support for the sustainable development of territories of all levels and, above all, their primary basis -municipal formations, acquire special significance. The research is based on the hypothesis of the relationship between the quality of infrastructure provision of municipalities, including their budgetary and managerial potential, and the sustainable social and economic development of the territory. Accordingly, the authors consider models of interaction between all subjects of economic and social ties of territorial formation, their innovative component and the nature of inclusion in the ensuring of sustainable development of municipalities. The recommendations on the formation of the financial security infrastructure with a view to ensure sustainable development of municipalities are also presented.
Research background: In the context of globalization, a steady trend towards the formation of “open” economies in the context of the international division of labor, the idea of states defending their national economic interests as the basis for their economic and political independence becomes particularly important. The basis for strengthening the economic base seems to be the formation of sustainable finances at all levels of government, especially at the municipal level, which is directly close to the needs of the population, as well as the active involvement of civil society in ensuring the independent and comprehensive development of territories. Purpose of the article: To study the transformation of municipal finances, turning them into the economic basis of “state-population” political exchange Methods: The research is based on J. Buchanan’s theory of constitutional economics about the “state-population” political exchange as a condition of social development. Findings & Value added: The research conducted by the authors allows them to conclude that due to the constitutional and legal status of the municipality, local government is the level where the real and most effective “state-population” political exchange takes place, acting as a driver of socio-economic transformations. Because of this, municipal finance becomes the economic basis for such an exchange and an indispensable condition for the harmonious sustainable development of territories, which gives special importance to the issues of their formation and evaluation of the effectiveness of public participation in the organization of their functioning.
In the article the authors consider the issues of ensuring sustainable development of territories on the example of municipalities, methods of monitoring and evaluating the rating of a municipality, in particular, investigate the possibility of compiling a comprehensive rating for assessing the budget potential of a territory in order to analyze its impact on sustainable development. The authors also analyze the satisfaction of the population of municipalities with the activities of local authorities, including on the basis of an assessment of budgetary performance indicators. The authors suggest possible directions for applying the approved methodology for rating the sustainable development of municipalities to form a territory development strategy.
At the present time, speaking about the measure of the financial efficiency of entrepreneurial activity, they mean only such an indicator as profit. It is a monetary expression of the funds left in the free disposal of the enterprise, which it can direct to improve its activities. However, an economic value category, such as value added, that allows, besides profit, also includes other components influencing the indicated efficiency and financial condition of the firm as a whole, allows to obtain an accurate cost estimate of the effectiveness of the final result of the firm's activity. We put forward a scientific hypothesis-there is a certain level of efficiency of financial and economic activity, added value, while preserving the financial stability of the enterprise, which provides the owner with an acceptable rate of return on operating, financial and investment activities and retaining ownership of the created assets.
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