Decentralization for local economic development (დეცენტრალიზაცია ადგილობრივი ეკონომიკური განვითარებისთვის)
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Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
An important strategic method to achieve Sustainable Development Goals
faster in the country is the applying Local Economic Development approach (LED
approach), for which it is necessary to have the preconditions in the country
provided through decentralization processes.
This paper presents: an analysis of the role of decentralization for successful
implementation of the Local Economic Development approach in Georgia; a
general overview of the current situation, problems and challenges in Georgia;
an assessment of relevant implemented reforms and problem solving ways.
Since 2010, changes have been made in all directions of decentralization
in Georgia ( for political, administrative, economic and fiscal decentralization).
However, despite the progress, the situation shows that many more reforms
is needed to be carried out in order to involve local self-governments in the
processes of local social and economic development and, moreover, to make
them becoming initiators of Local Economic Development processes.
It is noted that the current legislation of Georgia does not clearly separate
the role of municipalities in supporting entrepreneurship and stimulating
economic development at the local level, neither in their own, exclusive nor in
the delegated powers of municipalities. Performing functions related to socioeconomic
development depends only on the willingness, desire and initiative of
the local governments. In addition, municipalities have poor property and own
revenues in local budgets, and consequently, as a result of such conditions, the
role of Georgian municipalities in local social and economic development is not
important.
Problems related to low level of institutional capacity of municipalities
and low qualified human resources, which are considered as a threat of decentralization, are also a major obstacle for the applying of this holistic strategic
approach - Local Economic Development in municipalities of Georgia.
Therefore, mitigating the threats of decentralization and implementing
policies to strengthen and support the capacity of local governments will
significantly increase the effectiveness of Local Economic Development policies
and strategies in Georgia.
Description
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Keywords
Local Economic Development (LED), Decentralization, Strengthening Local Governments, Municipal Budget, Reforms, Fiscal Decentralization, Holistic-strategic approach
Citation
Economics and Business, №4, 2021, pp. 119-140