INSTITUTIONAL DETERMINANTS OF THE FINANCIAL CAPACITY OF TERRITORIAL COMMUNITIES: A MANAGEMENT PERSPECTIVE

Abstract

The article substantiates a management approach to analysing the institutional determinants of the financial capacity of territorial communities under martial law and post-war recovery. The relationship between the concepts of financial capacity and financial resilience is clarified. Financial capacity is defined as the ability of local self-government bodies, within the existing institutional environment, to generate and attract sufficient financial resources, manage them effectively and ensure the exercise of their powers and the development of the territory, while financial resilience is understood as the preservation and restoration of this ability under adverse conditions. Drawing on the new institutional approach, the authors propose a systematisation of the institutional determinants of community financial capacity based on three criteria: their nature (formal and informal), the level at which they are formed (national, intergovernmental and partnership interaction, local), and the degree of possible influence of local self-government bodies (decisive, partial, indirect). A distinctive feature of the systematisation is that the degree of managerial influence is assessed for each specific determinant, which makes it possible to take into account differences in the capabilities of local self-government bodies within the same level. The correspondence between groups of determinants and management instruments is substantiated, distinguishing instruments of direct change of rules and procedures, joint shaping of conditions and participation in their implementation, advocacy for change, and cross-cutting adaptation instruments. It is shown that achieving the expected effect depends on the content of institutional changes, the sequence of their implementation and periodic review of the combination of instruments. The results can be used by local self-government bodies to assess the scope of their managerial influence, select management instruments and develop the financial components of community development strategies.