Journal 2019#4

Assessment of the Regional Governmentís Efficiency

The article analyses domestic and foreign practice of assessing the regional governmentís efficiency. It al so examines the legislative framework that regulates such assessment. Based on the analysisí results we propose measures to improve the regulatory framework. The research hypothesis is that the current methodology for assessing the regional governmentís efficiency cannot comprehensively reflect the real situation. Considering additional factors of social and innovative development, which mostly impact the gross domestic product as the main performance indicator of a region, will increase the effectiveness of the regional government. Using regression analysis, we determined, how much the indicators used for calculating the regional governmentís efficiency in accordance with the legislative framework, influence the gross regional product. We also analysed additional factors that significantly impact the gross regional product. In addition, we built a comprehensive model for assessing the regional governmentís efficiency based on the linear regression method. The research has shown that the current legislative framework does not include a complete list of factors that affect the regionís development. Furthermore, the criteria for defining the most efficient regions (that receive additional grant support based on the assessment) do not allow implementing the stimulating function for these measures. The current procedure for grant support allocation to the most efficient regions leads to the increase of the regional developmentís differentiation. We provide a number of proposals for supplementing and improving the methodology for the regional governmentís efficiency, which are based on including additional factors that allow a comprehensive assessment of the regional managementís efficiency. The studyís results can be used for justifying the changes and amendments to the current legislative acts.