Financial and Credit Instruments in the Local Structural Policy of Urban Development in the Western Region of Ukraine

Анотація

The article discloses the peculiarities of the use of financial and credit instruments, in particular local borrowings, in the local structural policy. It is identified that the task of local self-government bodies of cities is to form their own local structural policy, which would focus on innovative, technological and inclusive development. The implementation of such a policy requires the use of a number of instruments, including budget, investment, financial and credit, grant, marketing and management, tax, etc. An important place is given to financial and credit instruments, as they allow attracting additional financial resources for the development of the city economy. Among the financial instruments, the author examines local borrowings, including bond loans and local guarantees. Bond loans have not become a common insrtument for attracting financial resources, which is associated with a number of obstacles to their issue. Among the cities of the Western region of Ukraine, only Lviv and Ivano-Frankivsk issued bonds for the period of 2015–2020. It is determined that local borrowing also does not play a significant role in the formation of the cities’ financial resources due to the low creditworthiness of the latter, as well as the complex procedure for obtaining. The instrument of local guarantees enables local self-government bodies to implement projects for the development of communal infrastructure and resource saving. Due to legislative restrictions, local self-government bodies cannot use local borrowings to implement local structural policies by supporting strategic sectors of the local economy. The full use of this instrument in local structural policy requires amendments to the legislation that would give greater autonomy to local self-government bodies and create opportunities for increasing the competitiveness of the urban economy.

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