Formation of the Economic Federalism Theoretical Model Based on the Dual State Nature

Abstract

The complexity of the economic aspects of federal relations and the multidimensional nature of management tasks predetermines the need to comprehend the essence of the system of federalism. Therefore, the purpose of this study is to substantiate a model that, on the one hand, considers federalism as the concept of the creation and functioning of the state system and as a way of managing the economy of the federal state on the other. Application of an evolutionary methodological approach allowed the author to divide the fundamental theories of federalism into two groups: the one examines federalism as a power paradigm, focuses on the federal principles of building a state, political and legal status The other examines federalism as a mechanism for coordinating the economic interests of its participants from the position of providing resources for fulfilling the assigned state functions at each level of the federal structure. The first group of fundamental works allows us to single out the essential features of federal relations. The second group of works made it possible to determine the economic principles of the functioning of federalism relations. Based on the highlighted features and principles of economic relations of federalism the article presents the author’s view of the dual subject essence of the state. Firstly, as a carrier of federal relations as a construct that structures and formats the territorial-state structure, as a mechanism of management and organization that sets the formal conditions for the reproduction of the subjects of the federal state based on the possession of power. Secondly, as an actor, one of the participants in the economic cycle of reproduction of the gross regional product based on the resources of the public sector. The proposed binary representation of the state allows us to show not only its creating role in the system of economic federalism, but also includes the goals of the regional economy in the federal system.