Methods and tools of influence on the development of regions

The characterization of a regional policy would be incomplete without a description of the methods and tools by which it is implemented. Methods and tools for implementing regional policy are a set, an arsenal of means and levers of influence of national and local authorities on the development of regions.

There are three main groups of methods for implementing management (including regions) (Fig. 1):

administrative (organizational-administrative, administrative-legal); economic; socio-psychological.

Sometimes legal methods are singled out in a separate group of management methods, and some experts focus on ideological methods of influence.

It is important to point out that the above classification is rather conditional, since, for example, economic and administrative measures of influence often mutually determine each other (for example, taxation, as an economic factor of management, is based on the relevant tax legislation, i.e. administrative and legal element). Socio-psychological methods are used both in countries with developed democratic traditions and in planned and administrative economic systems (psychological and ideological treatment of the masses) (for example, the forced “democratization” of Iraq or the “export of the revolution” from the USSR to Afghanistan).

From other positions, management methods, including regional, are:

(a) Direct and indirect. Direct methods of regulation provide for a direct impact on the processes taking place in the regions through the distribution of funds, subsidies, subsidies, preferences, subventions, as well as through the establishment of limits, norms, prohibitions, etc. Indirect regulation implies a change in the motivation, motivations, logic of actions of economic entities. At the same time, indirect methods of regulation relate mainly to economic instruments, while direct ones can be both administrative and economic (see Figure 1);

b) active and passive, in meaning sufficiently accurately corresponding to direct and indirect methods;

c) incentive (stimulating) and restraining (restrictive), aimed at activating or reducing business activity in the regions.

The toolkit of state regulation of the level of development of a country or region includes a standard set of tools, including:

budget policy (restraining measure – budget surplus, stimulating – its deficit); monetary policy (money issue; refinancing rate; required reserve ratio; open market operations); fiscal policy (taxation policy); social policy; investment policy.

In countries with developed market economies, the following specific mechanisms for managing territorial development are applied:

regionally differentiated subsidies and loans to firms to locate new production in problem regions; subsidies and loans to existing and crisis enterprises in the regions that are assisted; tax incentives and full exemption from taxes in order to locate production in the regions of priority development, and vice versa, exclusion from the system of benefits for investments of overpopulated or oversaturated areas; regionally differentiated legislative regulation of depreciation rates of fixed assets (depreciation policy); placement of new and relocation of existing state (or state-controlled) enterprises, as well as government agencies to problem regions; regionally oriented state subsidies and loans for the development of small and medium-sized businesses, as well as the creation of production, social, market and environmental infrastructure; privatization of state-owned enterprises, acquisition of shares in private firms or other forms of restructuring; state subsidies to local authorities (both targeted and free); preferences for state orders for the products of firms in depressed regions; bonuses for regional employment and other regionally differentiated programs of employment, training and retraining of the unemployed, etc .; measures to stimulate the mobility of the population and production (migration subsidies, information programs, etc.); state support for regional development agencies; permits, prohibitions, licenses, certificates and other means of direct control over the construction of production facilities and administrative buildings; rationing, rationing of consumption of certain types of resources (for example, building materials); forced government contracts for supplies to troubled regions; legal norms in the field of land use, environmental protection, etc.