Fedotova M.V.Russian Presidential Academy of National Economy and Public Administration, Volgograd Brunch, Volgograd, Russian Federation fedotova.maria12@ya.ru
Subject The article studies the economic relations arising in the process of stimulating municipalities to build their own profitable potential. Objectives The paper aims to develop a mechanism to stimulate local governments to enhance the efficiency of the management of revenue sources of local budgets, the level of fiscal capacity of the municipality. The Volgograd oblast municipal formations' budgets are the case study. Methods For the study, I used the methods of comparison, analysis, synthesis, computation, and statistical information processing. Results I propose certain mechanisms to leverage the local self-governments of the RF constituent entities, and I present the results of testing of the offered technique. Conclusions I conclude that in the Volgograd oblast, there are no enabling conditions for providing financial assistance to municipalities when forming the inter-budgetary relations and providing inter-budgetary transfers. The main areas of regional authorities' affecting the local self-governments are circulars and directives on formation and subsequent fulfillment of the plan. To a greater extent, the intergovernmental fiscal transfers are aimed at the alignment of fiscal capacity and financing the local self-government's powers.
Keywords: local government, income, budget, economic potential
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