Directions of modernization of the system of state and municipal management in the regions of the North Caucasus federal district

The authors evaluate the role of the North Caucasus Federal District in the economic space of Russia. The key challenges of development are specified. They include low volumes of produced gross value added, high level of unemployment, and the limitedness of domestic market. The authors explain the importance of budget financing for regional development; it is evident, in particular, in the large degree of dependence of regional and municipal budgets on the federal support. Due to the importance of self-management in terms of territorial and population dispersion, the special attention is focused on the financial autonomy of local budgets. The authors emphasize the significant dependence of municipal budgets on the incomes from higher bodies of the budget system. This problem is the most urgent in settlements. The proposals for increasing the financial autonomy of local budgets are formulated. They include more reasonable definition for each type of tax revenue of the municipality where local governments have the ability of economic influence, the implementation of strict fiscal and financial control over the activities of municipal enterprises, the improvement of the mechanism of citizens' self-taxation, consolidation of certain narrowly focused channels of higher budget funds. The authors give recommendations on the modernization of public and municipal administration in the North Caucasus region for the growth of the regional selfdevelopment potential and improvement of the effectiveness of budget spending: the introduction of project management of solution processes for strategic development.