Local Authorities and the Development of SMEs: International Experience and Guidelines for Belarus

Summary

The cooperation between local authorities and entrepreneurs is an important direction of development of small and medium enterprises (SMEs). Local authorities are able to determine the ease and the speed or (excessive) length and/or non-transparency of permission procedures, to set up tax rates, duties, and rent charges, and to define the possibilities of privatization of municipal property. Experience of other countries has shown that in the countries with a developed market economy, this cooperation is an important economic policy priority. The level of development of entrepreneurship and unemployment levels are in many respects determined by the policies of local authorities. This, for instance, proves to be the case in Poland and Germany. As for Belarus, this cooperation is still very weak. Our publication refers to the experience of the cooperation between local authorities and entrepreneurs accumulated in Poland. Also, the analysis is extended to the situation in Belarus; the assessment of the potential and opportunities for the support of SMEs development by regional (and local) authorities is made. The final section outlines a number of policy recommendations on how could entrepreneurship be supported and SMEs’ competitiveness enhanced by local authorities.