MUNICIPAL BONDS IN THE SYSTEM OF FINANCING TERRITORIAL COMMUNITIES: FOREIGN EXPERIENCE IN ATTRACTING INVESTMENTS

Abstract

The article examines the role of municipal bonds in the system of financing local communities in foreign countries, with a focus on their function as an effective instrument for mobilizing long-term investment resources. The main approaches to organizing local borrowing in developed economies are analyzed, taking into account differences in institutional frameworks, fiscal decentralization models, and capital market development. Particular attention is paid to investment municipal bonds as a key tool for financing infrastructure projects that ensure sustainable socio-economic development of territories.

The economic essence of municipal bonds is revealed, their classification is systematized, and the features of general obligation bonds and revenue bonds are characterized. The article summarizes international practices of using targeted infrastructure bonds to finance socially significant projects in the fields of transport, energy, housing and communal services, and social infrastructure. The structure of the global municipal bond market is analyzed, which makes it possible to identify significant regional and country asymmetries in the scale of their use.

The key advantages of municipal bonds for local communities are identified, including diversification of funding sources, reduction of pressure on central government budgets, strengthening of financial autonomy of local authorities, and stimulation of private capital involvement in public infrastructure development. The feasibility of activating the municipal bond market in conditions of limited budget resources and growing investment needs is substantiated.

Special attention is focused on the possibilities of applying foreign experience in national practice, taking into account the challenges faced by Ukraine in the context of post-war recovery. The prospects for the use of investment municipal bonds in financing the reconstruction and modernization of damaged infrastructure of territorial communities are identified. It is concluded that investment municipal bonds can become an important and sustainable source of financing for post-war recovery, provided that appropriate institutional conditions, transparency, and effective debt management mechanisms are ensured.