Economic and financial aspects of Serbia's regionalization
In: Zbornik Matice Srpske za društvene nauke: Proceedings for social sciences, Heft 112-113, S. 69-96
ISSN: 2406-0836
The paper has two parts: in the first one, economic aspect of regionalization is considered, in the second a financial one. Regionalization, like every type of decentralization, represents a serious reform of a state and brings upon several expected as well as unexpected although significant effects on political, social, and economic life. Its goal is an improvement of political, social, and economic functions of a state, not their deterioration. Unfortunately, experience of other countries does not support overwhelming optimism. Most frequently, regionalization is done due to political considerations; economic considerations are of secondary importance or even neglected. Such a dominance of political reasoning neglects fundamental principles and arguments of the economic science, standards of rational approach to decentralization, and even economic efficiency and equality between citizens. Because of that, the emphasis in this paper is on economic and financial aspects of regionalization in Serbia. In the first part the author explores economic aspects of regionalization; four state functions (regulation, stabilization, redistribution, and allocation) in decentralized setting; relations between regionalization, deregulation, and privatization; vertical distribution of functions (exclusive functions by the state, exclusive functions by regions, shared functions). After that he explores advantages of the selected model of creating regions and distribution of authorities in Serbia, particularly economic authorities of regions (1. land planning, urban land use, housing; 2. development and maintenance of infrastructure of regional importance and coordination of public utilities in municipalities; 3. agriculture; 4. tourism; 5. forestry 6. hunting and fishing; 7. vocational training and employment; 8. ecology; 9. public works). Separate section is devoted to social protection (financial transfers and institutions). In the second part of the paper (Financing the Regions) the author first examines certain issues in principle (fiscal revenues, vertical and horizontal balance, debts and moral hazard) and then considers topics of financing regions in Serbia, such as revenues subsidies, and debts.