Journal of Applied Economic Research
ISSN 2712-7435
Principles of Design of the Institutional Environment of Local Public Goods
Popov E.V., Veretennikova A.Yu., Sevastianova E.A.
Abstract
Abstarct. Building an effective institutional environment of local public goods (LPG) is a prerequisite for the optimal allocation of resources to provide the population with quality public goods. In this article a classification of local public goods was developed that is based on the types of roles that are performed by economic agents in the sector of local public goods, key economic agents involved in the production and consumption of local public goods were identified, the rules that govern the decision-making process on the creation of public goods were revealed, principles recommended for use in the development of the institutional environment of local public goods were set out based on the achievements of the institutional-evolutionary theory. Based on the analysis of the evolution of institutional design, principles of institutional design of local public goods were formulated. These principles include the principle of setting goals, the principle of taking into account the scope of LPG, the principle of functional completeness of LPG, the principle of consideration of the multiplicity of qualitative characteristics of LPG, the principle of taking into account the roles of economic agents and their incentives, the principle of sufficient financial support for LPG, the principle of adaptation of newly created or modified LPG to the current institutional environment, the principle of monitoring results of the institutional environment of LPG. The proposed principles emphasize the need to ensure the quality, price and territorial availability of local public goods, taking into account the local peculiarities as well as the diversity of the types of relations between the economic agents as regards the production of public goods. The theoretical significance of the results is the development of the provisions of the institutional design of local public goods.
Keywords
Key words: local public goods; institutional design; principles; public sector.
About Authors
DOI: http://dx.doi.org/10.15826/vestnik.2016.15.6.40
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