Page 106 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

5. Regulation of regional development.

3. Methods of regulation of regional development

The regulation of regional development is implemented both
directly and indirectly. Direct regulation is realized by the administrative

methods and tools applied by the local authorities. This includes

permissions, rules and mandatory points. Indirect regulation is in
contrast implemented by the means of economic policy.

Direct regulation is based on the structure of authorities and
relations between its components. Regional regulation is implemented in

following administrative ways:
• Orders and decisions made in respect of widely repeating events;

• Rules regulating the activity of some particular group of entities

in the region (normative regulation);
• Recommendations, audits (financial, budgetary, tax and etc) and

controls (for example, mining, epidemiology and etc.).

Administrative methods deal with entities which did not fulfill the
requirements of commonly accepted rules, application of mandatory points

and actions for the entities, they also regulate the privatization process,
resolve the problem of attraction of foreign capital, efficient utilization of

natural resources and other social problems existing in the regions.

However it is not possible to resolve all problems by the means of
administrative methods. Therefore administrative methods should be

combined with economic ones [Closer Neighbors: Proposal for a New
Strategy for the Nordic Co-operation with the Adjacent Areas

Kopenhamn, 2000: 11].

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