Economic and financial independence of territorial selfgovernment units

Implementation of the country’s decentralization and democratization processes requires definition of the territorial selfgovernment’s independence, while the determinants of the independence of the territorial selfgovernment units (TSGU) that define its kind and scope can be divided into systemic, economic, social, political and legal ones. The research on the territorial selfgovernment’s independence conducted in formal terms consists in analysing the relationships between the state and the territorial selfgovernment as well as between the TSGU units and the agencies that constitute the internal structure of the selfgovernmental economy. Whereas the territorial self-government’s independence in substantive terms can be considered in relation to: the sphere of real activity, i.e. social and economic activity (tasks to be carried out) and the financial sphere, i.e. the selfgovermental financial policy (the financial resources at disposal versus the tasks the and powers to implement those tasks). The basic condition of territorial selfgovernment units’ independence is their financial independence (i.e. the income, expenditure and budget independence as well as the capacity to contract debts), because he who has money is the one who rules.