Municipal enterprises and their role in effective distribution of resources between different municipal services

This article examines the place of the municipal enterprises in the service of the local community in general, and in the rendering of municipal services in particular. The methods of services rendering by individual municipal authority or enterprise and the directly by local authorities are compared. These models vary considerably in efficiency and organizational support. These differences allow get answer to the question of the expediency of involving the municipal enterprises to the rendering of municipal services. The author defines the criteria, which allow assessing the place of municipal enterprises in considered sphere and getting answer to the question of the expediency of involving of municipal enterprises in the economy of the territory. The research also focuses on ways to improve efficiency, accountability and transparency of the management of municipal enterprises. A significant part of the impact and mechanism of direct responsibility to the people must be supported with the help of supervision of municipal services, otherwise there is a great temptation to start uncontrolled expansion and implement investments in new assets without appropriate investments in other municipal spheres. The activity of local authorities satisfies these criteria better than the performance of individual municipal enterprises. The financial independence of the last mentioned more contributes to attempts to build empires and unjustified costs. Municipal enterprises do not have unique advantages; their existence creates or contributes to the creation of problems in the sphere of decision-making, and also leads to unnecessary costs for the local authorities and population. Their abolishment would increase the efficiency, accountability and transparency of the public sector.