DECENTRALIZATION AND LOCAL ECONOMIC DEVELOPMENT IN THE KNOWLEDGE SOCIETY

The sustainable development became a goal for knowledge society, but one of the main question in literature remains as how close is the relationship between economic dvelopment, knowledge society and local governments' level. Given the great diversity of situations and frameworks both across countries and within them in the European Union, I consider that each country must have own policies designed to implement process of decentralization with the commitment of "healthy" economy in a society dominated by the technology and innovation. In this context, the problem occurs in decentralization should be managed on two levels: on the one hand in terms of central-local budgets relations, and on the other hand, in the local public finance structural plan. The paper will try to emphasize the connection between decentralization, local economic sustainable development and knowledge society, taking into account an overview of this three aspects and empirical evidences. In this regard, I will use the background offered by literature and the official statiscal data for analysis to identify the variables which explain decentralization and local economic development in the knowledge society. I estimate the analysis to confirm the hypothesis that there are good aspects, but also deficiencies that require solutions and budgetary policy options as part undisputed positioning local government finance as an engine of development of the whole nation. I consider that the paper can be a useful viewpoint in understanding local public finances in decentralization, which allows researchers to include other sources of information for researching an in a much more complex approach