Importance The lengthy process of reforming the inter-budgetary relations and local self-government along with crisis developments in the economy have not supported the formation of an efficient system of local budget management. Objectives The study aims to formulate theoretical principles of local budget management, i.e. to define the economic substance, reveal major contradictions, and offer its original concept. Methods The study employs a dialectical method, systems approach, theoretical underpinning, scientific abstraction, generalization, and comparison techniques. Results I unveil major contradictions in the management of local budgets that relate to economic entities, financial flows of local budgets, management practices, institutions, and the goal and system of local budget management. The paper presents an original concept of local budget management, which is based on coordination of financial interests. Conclusions If taken into account, the revealed inconsistencies in the local budget management will contribute to making better management decisions in this area. The proposed concept may be useful for improving the fiscal policy and strengthening the institution of local self-government in Russia. Ultimately, it will enhance the efficiency of funds management by local authorities.
Keywords: intergovernmental fiscal relations, local finance, local budget, municipal reform, finance organization
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