State regulation of economy competitiveness: methods and mechanism

In article the analysis of methods and the mechanism of state regulation of competitiveness of economy is carried out. The author placed emphasis on need of state regulation of competitiveness of national economy. The conclusion is drawn on what the state is capable to create conditions and prerequisites for strengthening of competitiveness of the country and economic growth in economy. It is noted that for increase of competitiveness of economy quoting, licensing, irrevocable target financing of regions, the enterprises, branches can be used control over the income, the prices, discount rates, the state has to create favorable conditions for development of importsubstituting productions, stimulating and increasing investments into production of import-substituting production. Ensuring competitiveness requires the mechanism which allows to use resources and factors of competitiveness effectively. One of the most important and key tools and factors of successful development of economy is existence of the qualitative human capital.

In modern conditions from political leaders and economists of many countries recognition of need of strengthening of a role of the state for providing prerequisites of long-term economic growth and maintenance of social stability is observed. Only the state can create conditions for economic growth and increase of competitiveness of national economy.

Methods of state regulation, despite their certain variety, it is possible to break into the following groups: administrative regulation, direct and indirect economic regulation. Various control measures over the income, the prices, discount rates, quoting, licensing, etc. belong to administrative methods of regulation. These measures belong to administrative because they aren't based on economic interests and incentives realizing them, and are carried out on the basis of the legislation through system of the norms and rules established to them.

Various forms of irrevocable target financing of regions, the enterprises, branches belong to direct economic regulation - these are subventions or direct subsidies which include different grants, grants, surcharges from special budgetary and off-budget funds of various levels (nationwide, regional, local). Here soft loans belong. Coordinating interests of various levels and subjects of managing of different social groups, these types of regulation promote alignment of their financial position, protection of the most vulnerable sectors of economy and groups of the population, achievement of the priority purposes of economic development. At the same time, being built in the market relations, they to a certain extent form structure of the prices and expenses and real competitiveness of separate sectors of economy [1].

On a joint of administrative and direct economic methods of regulation there are such forms of state regulation adequate to modern mixed economy as program and target approach, a project financing and crediting. Implementation of the general and special target programs and projects planning development reference points in any area along with application of administrative and organizational measures is supported with the appropriate financial resources.

The policy pursued by the state belongs to indirect forms of economic regulation in the field of credit and financial, currency, external economic (including customs) the relations, tax systems, depreciable property, etc. Thus, the state, using economic interests and incentives, influences economic behavior of the subjects of managing acting as producers and consumers. That is indirect forms of ekoknomichesky regulation influence production and consumption indirectly and have addressless character.

Some scientists consider indirect economic regulation more widely, carrying to it also various measures for creation of the competitive environment. For example, M. Porter considers that the government has to create such economic situation which encourages for firms and pushes them to higher steps of competitive development. The most effective levers of indirect influence are: creation of the technologies corresponding to modern level and factors of production, formation of national priorities of scientific and technical development, encouragement of the competition and demand for quality production [2].

However, as experience of the developed countries, not all functions necessary for normal course of reproduction process and providing full-fledged life of society testifies are realized by means of the market relations as the mechanism of the free (uncontrollable) market is often insufficient for ensuring macroeconomic stability. In this regard development of the market generates the functions and the institutes corresponding to them demanding the centralized management such as financial, bank systems, etc. In process of development of scientific and technical progress there are new types of productions, and also the new groups of goods and services demanding the centralized intervention (control) in process of their production. Depending on a way of the organization of production in economic literature it is accepted to allocate two groups of goods (services): the public benefits which production is in whole or in part financed or controlled (and sometimes and it will be organized) the state, and private, made by the enterprises only at the expense of own means.

Feature of the public benefits such is that the state has to control and regulate processes of production, distribution and an exchange of the corresponding goods. Thus, the market mechanism substantially should be supplemented with system of the state intervention. Application of various forms of state regulation doesn't mean replacement of the market relations administrative as in national economy the specific economic entity - the state works. Its device is urged to carry out economic functions strictly within the means which are available at its order. The realization of methods of state regulation of economy is enabled through macroeconomic planning in market conditions [3].

In a number of the countries with market economy, for example in Japan, during all post-war period national plans of economic development which, according to some Japanese economists, had formal character were formed and influenced real processes in economy a little. However such plans play the constructive role. Without undermining an initiative of private business, they help to plan the general course of management of the enterprises, informing their planned divisions on a potential demand, a situation in adjacent areas, a condition of the market of labor, etc. Plans of economic development make a certain constraining impact on government expenses as the adoption of annual budgets happens taking into account planned bastings (though they for anybody aren't obligatory).

The regulating activity of the state in Kazakhstan can be reduced to several main functions now. It, first, drawing up macroeconomic plans forecasts, or, in other words, indicative plans. Their appointment - definition of the main reference points relating to scales, proportions and ultimate goals of development of production. At the same time the main problems which it is necessary to face at implementation of the plan come to light. The document created as a result simply informs the public and a business community on an estimated overall picture of state of the economy.

It is possible to refer formation of the decisions which are directly mentioning structure of economy to the second form of participation of the state in management of a social production. It, first of all, distribution of the centralized investments and other resources controlled by the state, placement of state orders, settlement of the arising social problems, creation in this or that region of favorable climate for attraction of private investments by an investment of public funds into development of infrastructure.

The third form of influence of the state on economic activity is a development of system of regulators for the processes which aren't falling within the scope of direct state control. Such regulators are urged to maintain stable nature of economic development. Among them taxes, grants, the principles and methods of pricing, and also tax and credit privileges to priority branches, customs rules, etc. The major regulating role in modern market economy belongs to credit policy tools, ensuring stability of monetary unit and balance of external payments.

The ratio between the designated three forms of participation of the state in management of economy varies depending on specific conditions.

State regulation has to be carried out at the different hierarchical levels: on economic, branch, regional, at the level of the enterprise. In different branches and spheres of national economy, in various regions the system and methods of regulation and a role of separate regulators can significantly change.

Development of real sector of economy, its modernization on the basis of protectionist policy in relation to the Kazakhstan producers without which the Kazakhstan enterprises will be noncompetitive not only in the world market, but also in the former Soviet Union [4] has to be a priority of state regulation

So it developed in practice that, the it is less than state intervention in economy, the it is more than opportunities for its liberalization and restoration of market balance, the more it results in uncontrollability and instability in society, to steady decrease in GDP, curtailment of national production, narrowing of the market for national producers. The market economy demands from the state of the mature approach in use of various methods of economic policy allowing to smooth negative effects of a market mechanism and support of macroeconomic balance of system in general. Experience of development of the western countries shows that for successful functioning of a market mechanism the relevant system of the property rights, laws and rules providing their transfer, legal institutes, decision-making mechanisms is created. And in this case pertinently to remember Hayek F. statement. about that only in understanding of the vulgar liberals capable only to compromise idea of economic liberalism, everything becomes "by itself" under faultless guidance notorious "an invisible hand".

Development of market economy and ensuring the equal competition demands behavior of a purposeful and consistent state policy on ensuring economic freedom. Existence of market structures and their ability to work in the mode of the market competition defines competitiveness of the country which is an indicator of a state and prospects of development of national economy, a basis for participation in the international division of labor and trade.

For our country the problem of preservation of competitive positions in the world market is particularly acute especially as in modern conditions those factors which could provide growth of competitiveness in the future are substantially lost.

Having analysed methods of impact on competitiveness of national economy, it is possible to draw a conclusion that adequate regulation has to proceed from this, on the basis of what factors national competitive advantages, and only in process of their complication are created, increase of competitiveness of national economy and preparation of prerequisites for transition of the country to the new stage of development of the competition leaning on other dominating factors is possible. Major factors of development of the competition in the developed countries are investments into economy and innovative development therefore it is necessary to create conditions for activization of investment process in Kazakhstan, creation of innovative strategy of development of research and development, etc.

It is necessary to create the optimum macroeconomic conditions allowing to increase national competitive advantages and which promote dynamic transition from the competition of the prices to the competition of technological processes. However together with attraction of the foreign capital there is a question of penetration of the foreign capital into those branches which represent national security. And here observance of national interests of development of competitive branches with use of foreign sources for stimulation of investment process and providing national economic security, certainly, belongs to the regulating role of the state.

One more fundamental issue for attraction of foreign investments is providing conditions of the equal competition, namely observance of a national treatment: equal approach to domestic and foreign investors. It needs to be observed in a type of that when the state supports in every possible way domestic producers, it leads to decline of the company, decrease in the income and, the most important, to decline in quality. And the reason in the nature of market economy: decisions are made by those who risks own money, and it is very strong incentive for acceptance of carefully thought over and right decisions. When the risk is assumed by the producer, it forces it to belong very responsibly to the production, to do careful calculations and to watch quality. The foreign investments coming to the country are never solved problems of ensuring competitiveness. However the positive effect of foreign investments can be shown in competition strengthening that will stimulate national producers to growth of labor productivity and improvement of technology.

One more important method of state regulation of competitiveness is the policy of the accelerated depreciation. The actual value of the accelerated depreciation for the enterprise - a delay of repayment of obligations for income tax as the first years the considerable part of profit goes to a covering of expenses on depreciation and, thus, avoids the taxation. The postponed tax in the conditions of market economy means interest-free, poor I will jam for the certain term provided to the taxpayer by the state budget. The policy of the accelerated depreciation has two important consequences for economy: stimulation of technical innovations which reduces service life of the former equipment, and increase of prime cost of products.

The innovative sphere is considered by the author as the main component of growth of competitiveness of economy in the world market. In the conditions of lack of sufficient financial resources for support of all fundamental directions of science and industrial research and development in Kazakhstan, it is important to carry out the right strategic choice of selective support of that scientific development which will allow Kazakhstan to overcome lag in development of the country. Everything that has an ultimate goal creation of information product, modern equipment, basic researches and education has to find support of the state as the highest national priority.

Carrying out the long-term policy of regional development directed on the solution of the interconnected tasks, such as in France is of great importance. Creation in regions of the advanced scientific centers and the accompanying productions in the most developed and competitive branches which are effectively working in national economy will allow to eliminate unevenness of development and backwardness of certain regions. The French experience shows that the regional policy will be more effective if it follows the principle of building of the branch nodal elements making power of branch. One branch creates demand of the increased complexity or acts as the supplier of products and services of production appointment for others. Incentive for development of underdeveloped regions is placement in their territory of the allied industries delivering an intermediate product, and also creation of own scientific and educational base [5] on the market.

Development of the economic relations of economic entities is defined by its level of competitiveness. The certain mechanism allowing to use effectively available resources and factors of competitiveness is necessary for ensuring competitiveness.

The concept "mechanism" is treated as set of methods and levers on economic processes, their regulations. On methods and levers it is possible to allocate the organizational and economic mechanism. The organizational is understood as set of the organizational forms and methods providing formation, development of system. The organizational mechanism is urged to create optimum conditions for providing a stable legal situation for business life, protection of the competition, guaranteeing the property rights and freedom of adoption of economic decisions.

The main objective of the organizational mechanism is improvement of the organization of management and regulation of economy. The economic mechanism being part of the mechanism represents system of economic receptions, methods, incentives by means of which stages of a production cycle and aimed at providing competitiveness are regulated. The organizational and economic mechanism of ensuring competitiveness can be presented in the form of a complex of set of mechanisms, each of which is realized by means of certain methods of impact on competitiveness of the enterprise: mechanism of providing with the enterprise, mechanism of accumulation of demand for a domestic production, mechanism of the state providing. The mechanism of providing with the enterprise includes the certain methods connected directly with internal factors of competitiveness [6]

For the Kazakhstan enterprises are the most actual such as improvement of management and marketing for decrease in costs of production, to use active advertizing for increase of demand for the production, actively to use innovative technologies in production and administrative processes. Price and not price methods of the competition for demand formation have to use the management of the enterprises actively. The mechanism of accumulation of demand in many respects depends on state mechanism of ensuring competitiveness. Among the presented mechanisms of ensuring competitiveness of the industry with the most effective mechanism the state providing owing to effectiveness and productivity of measures is. So, for example, industry, republican, regional programs for providing this or that purpose are formed.

World experience shows that in competitive fight win those countries in which domestic demand is focused on domestic goods. The role of the state in functioning of market economy in the different countries isn't identical. It differs on scales, forms and methods of impact of the state on economy that is caused by many factors of objective character, also influence of traditions and representations, characteristic for this society. Irrespective of specifics economic, cultural, national historical development of the different countries, the economic role of the state can be presented by the following major economic functions:

  • - development of the economic legislation, providing a legal basis and the social climate promoting effective functioning of market economy;
  • - support of the competition and ensuring safety of a market mechanism;
  • - the redistribution of the income and material benefits aimed first of all at providing social guarantees and protection of various public groups needing it;
  • - regulation of distribution of resources for change of structure of a national product;
  • - stabilization of economy in the conditions of fluctuation of an economic environment, and also stimulation of economic growth.

All these functions are directed on maintenance and simplification of functioning of market economy and on correction of actions of market system, including neutralization of its negative sides [7].

The state has a huge arsenal of instruments of direct and indirect impact on economic events, including on ensuring competitiveness: forecasting and planning, financial and budgetary regulation, tax regulation, monetary and credit regulation, foreign trade and standard and tariff regulation, and also administrative and legal and license regulation. In total these tools make a basis of the economic mechanism of the state ensuring competitiveness.

For formation of the enterprises with a full cycle of production to finished goods, for creation of strong communications between the existing enterprises it is necessary to consider creation of clusters as an exit from current situation. Kazakhstan possesses the good scale of market opportunities, as for development of branch in general, and separately taken sector of the industry. Also integral condition of successful development of the industry is existence of the qualitative human capital. Therefore it should be noted such element as higher education institutions, colleges providing the industry with professional shots. On bases universities it is necessary to organize advanced training courses of specialists of the industry, for training in new technologies. For maintenance of stable conditions of development the crucial role is played by strategic planning and forecasting [8].

Preliminary organizational work on planning and forecasting is objectively necessary for effective use of other instruments of state regulation. The mechanism of the financial and budgetary regulation is the most effective for ensuring competitiveness of the enterprise as through financing at the expense of budgetary funds it is possible to solve financial problems of crisis branches. The mechanism of the taxation allows to stimulate development of the industry providing release of competitive goods.

Practice of managing of industrialized countries shows how flexible and effective monetary and credit mechanism of regulation. The purpose of this method of regulation - achievement of the general level of production at a full employment and lack of inflation. Regulating process of crediting it is possible to control money supply, thereby the inflation process which is negatively affecting development of the industry.

There are straight lines and indirect measures of impact of the state on the prices. Direct measures are carried out by establishment of a certain order of pricing, indirect measures are directed on market condition change, creation of a certain situation with the taxation, finance, currency transactions. For increase of efficiency of foreign economic relations it is possible to use actively the methods of the foreign trade regulation allowing both to protect interests of domestic producer, and to provide the market with import goods in the absence of own production. Economic recession in economy in many respects is defined by low competitiveness of the domestic industry.

The reasons which are not only technological problems, but also low efficiency of management of the enterprises, negative impact on domestic producers is made- by the existing tax law and low efficiency of measures of the state support of a domestic producer. The state can promote development of export production. For this purpose concerning the export focused enterprises of manufacturing industry the flexible tax policy is necessary. Including the accelerated depreciation, soft loans, including the mixed stateprivate credits, and in some cases and direct public financing. The state can act as the guarantor of the foreign credits for these enterprises, and also take such protective measures as, decrease in the VAT, land lease, tariffs for utilities, etc. [9]

Besides, the state has to create favorable conditions for development of import-substituting productions, stimulating and increasing investments into production of import-substituting production. Stimulation of production has to include a number of measures for granting subsidies, soft loans, tax privileges and other tools for protection of the interesting productions. Besides, it is impossible to forget and about stimulation of domestic demand for import-substituting production, here the state shouldn't be limited only to the state orders. It is necessary to use actively other measures for formation of demand for a domestic production. The foreign trade policy belongs to important instruments of stimulation of domestic demand for import-substituting production. The customs and tariff policy of Kazakhstan too liberally belongs to foreign trade. The trade policy of the developed countries is less liberal, in comparison with the countries of the former Soviet Union.

Limiting factor of increase in domestic demand for a domestic production is low competitiveness in comparison with imported on price and not price factors. The policy on ensuring competitiveness has to be directed on improvement of quality of domestic goods and relative reduction of prices by import rise in price. For ensuring competitiveness the state by rise in price of import can influence relative reduction of prices of domestic goods. The enterprises in turn have to establish the reasons of noncompetitiveness of production.

The state has to take measures for ensuring the state control and supervision in the field of standardization and certification of production. Standardization and certification allow to improve considerably quality of production, existence of the certificate is pledge of an exit of the enterprise to the world market and a considerable component of commercial success. Certification is connected with legal protection of the consumer. The main task of the state - creation of the high, steadily raising standard of living of the citizens. Competitiveness in this case - means of this general purpose. Ability of the state to solve this purpose depends on efficiency of use of a national resource, the production and a state policy within ensuring competitiveness.


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Year: 2015
City: Karaganda
Category: Economy