This study is dedicated to the rationalizing of theoretical and methodological principles as well as elaboration of practical recommendations for the improvement of the financial mechanisms of regional development. Scientific findings in the area of financial mechanisms of regional development have been subject to analysis; the purpose and the main objectives have been set and financial principles and instruments of regional development have been defined. The role of financial support has been rationalized in relation to the specifics of the social and economic interests of the region and its steady development. The main purpose of reforming the financial mechanisms has been set as such providing for the social and economic development of the regions in the Russian Federation. It has also been clarified that the financial potential of the region is a key factor in serving social and economic interests of the region by means of financial mechanisms.
TopBackground
The shift of the Russian economy towards the market economy made a drastic change in building up and utilizing regional financial resources. This resulted in a more significant role of finance and financial policy which aims at the acceleration of economic growth and creating competitive environment. All the branches of the regions’ financial system are responsible for the policy implementation as they are directed towards a common goal of mobilizing financial resources and their efficient utilization (Morozova, 2010).
Successful performance and development of the regional economy greatly depend on the conditions in the region and its ability to provide self-sustained budget for its activities, define its own priorities in development and financial stability maintenance and achieve well-balanced financial indices while expanding its economic resources (Verbinenko & Badylevich, 2012).
These factors contribute to the bigger financial functionality range of the region when it concerns socio-economic development and require strengthening financial support by means of efficient management of available and potential financial mechanisms.
Maintenance of the stable economic growth in the regions, as well as in the country, remains a priority task of socio-economic development. Thus, the urgent issues in focus are evaluation of the economic potential of the region, application of efficient instruments of its utilization, economic effect maximization and meeting the needs of the enterprises and constituent territories of the region.
The purpose of the research is elaboration of practical recommendations on strengthening the financial mechanism of regional development, whereas its objectives include: