SOCIAL INVESTMENT MODEL OF REGIONAL GOVERNANCE: DEVELOPMENT PROSPECTS FOR THE SOUTH-RUSSIAN MACROREGION

http://www.iaeme.com/IJCIET/index.asp 124 editor@iaeme.com
International Journal of Civil Engineering and Technology (IJCIET)
Volume 9, Issue 11, November 2018, pp. 124–138, Article ID: IJCIET_09_11_013
Available online at http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=9&IType=11
ISSN Print: 0976-6308 and ISSN Online: 0976-6316
© IAEME Publication Scopus Indexed
SOCIAL INVESTMENT MODEL OF REGIONAL
GOVERNANCE: DEVELOPMENT PROSPECTS
FOR THE SOUTH-RUSSIAN MACROREGION
Beburi Meskhi*
South-Russian Branch of the Federal Research Sociological Center of the Russian Academy
of Sciences, Rostov-on-Don, Russia
Corresponding Author*
Viktor Vasilyev
South-Russian Branch of the Federal Research Sociological Center of the Russian Academy
of Sciences, Rostov-on-Don, Russia
Vladimir Uzunov
Crimean Branch of the Federal Research Sociological Center of the Russian Academy of
Sciences, Simferopol, Russia
Anzhela Salogub
Pyatigorsk State University, Pyatigorsk, Russia
Alexandr Popov
Southern Federal University, Rostov-on-Don, Russia
ABSTRACT
The article discusses the current problems of formation and implementation of a
social investment model of regional governance in the Rostov Region representing the
South-Russian macro-region. Analyzing intra-management processes in the regional
governance system, the author notes that transition to the social investment model of
regional governance is delayed, since a replacement of management teams, enhanced
authority of the institution of the governor, and the middle position of the Rostov
Region in a regional status hierarchy have been hampering the social investment
model formation. It is also necessary to take into account the factor of intra-regional
competition and influence of the neighboring Krasnodar Territory on the regional
situation and relations with the federal center. In this context, the Rostov Region’s
position is less competitive; therein, formation of a social investment model of
regional governance is associated with “development plants” and with a reduction in
the gap between the regional center and its peripheral areas. According to the author,
the development prospects of the Rostov Region are determined by establishing

Beburi Meskhi, Viktor Vasilyev, Vladimir Uzunov, Anzhela Salogub and Alexandr Popov
autonomous social investment institutions in the system of regional governance,
implementation of joint interregional cooperation projects, and constant interaction
within the framework of regional and local governance.
Keywords: Regional Governance; Rostov Region; Social Investment Model; Regional
Center; Interregional Cooperation.
Cite this Article: Beburi Meskhi, Viktor Vasilyev, Vladimir Uzunov, Anzhela
Salogub and Alexandr Popov, Social Investment Model of Regional Governance:
Development Prospects for the South-Russian Macroregion, International Journal of
Civil Engineering and Technology, 9(11), 2018, pp. 124–138.
http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=9&IType=11
1. INTRODUCTION
While noting that the regional governance system in Russian society is having difficulties and
sometimes inconsistencies switching to the social investment model, it should be borne in
mind that the Russian regions are heterogeneous in their climatic, socio-cultural, economic,
and socio-territorial characteristics, and the regional status hierarchy is premised mainly on
financial and economic parameters and intergovernmental fiscal relations.
Therefore, it seems important to refer to the specifics of formation and implementation of
the social investment model of regional governance in the South-Russian Region. This choice
is determined by the fact that the South-Russian Region is primarily a middle region; the
constituent entities of the Russian Federation included in the South-Russian Region are
heterogeneous in terms of their economic development and the degree of interaction with the
federal center while sharing a common pattern in terms of both administrative legal
regulation and problems related to the quality of human resources.
Regional governance is facing an acute issue of the social investment efficiency, which
has extended from the corporate level to the regional one. Investment in human capital in the
South-Russian Region can be observed in the degree of interest in the development of core
socioeconomic segments of the region. It is referred to the industry rebranding, to tourism,
and to logistics (the transport infrastructure). The social infrastructure in the majority of the
constituent entities of the region is characterized by a rather high degree of deterioration
(60%). At the same time, the entities within the South-Russian macroregion can be
differentiated into the leading ones (the Krasnodar Territory), “middle” ones (the Rostov and
Astrakhan Regions), and depressed ones (the Volgograd Region and Kalmykia). In this
context, the social investment model of regional development should be based on the totality
of objective parameters and mission-related management resources.
2. RESEARCH METHODOLOGY
Spatial development strategies for Russian society form a discussion field, including
presentation of approaches that characterize both fundamental concepts, such as “spatial
development”, “region-wide space”, “region”, and operational ones, such as “social
innovations”, “social changes”, “social investment”, and “social capital”, as an integral
element. The discussion is essentially centered on major approaches to the assessment of
ways, goals, and priorities for regional development.
In the “technological” approach expressing the priority of “technology and money”,
regional governance models are qualified according to the criteria of “concentration of
demographic and production resources” (agglomeration effect), surplus population transfer

Social Investment Model of Regional Governance: Development Prospects for the South-Russian
Macroregion
(rural areas and small cities), infrastructure development and, as a generalizing criterion, the
economic efficiency of regional governance.
The second socio-centrist approach is critical of “claustrophobia and gigantomania” and
proceeds from an experience of even spatial development focusing on “human saving”,
“reliance on small cities”, and “the effect of specialization in the framework of regional and
local social and economic development projects”. As part of this approach that aims to
develop an integrated spatial development strategy, the regional governance model is based
on the criteria of “optimizing the existing capacities and resources”, “reproduction and
development of the human capital”, “finding optimization schemes for intraregional
resources”, “growth of social and investment attractiveness of the region”.
Foreign researchers J. Addie and R. Keil point out that real regionalism is under pressure
from three factors: negotiation, territory, and technology. The approach to regional
governance is determined by the territorial factor differentiation and by the fact that what can
be considered an operational criterion for the model of regional governance in “large-scale
territories” is a configuration of interests and experience of negotiation between influential
actors of regional society. In the regional governance model with concentrated territoriality,
the catalyst is the use of the latest technology as an effective way of regional governance
informatization with minimized role of negotiation forums [19].
When choosing a methodology, it is obviously necessary to take territoriality into account
in order to form a social investment model of regional governance that would define the
awareness of differences in the methods of social investment policy for the South-Russian
Region that faces the intra-regional dialogue challenges but where a technology adoption
steppingstone has been created. As a consequence, what should be a priority research
methodology is constructing a hierarchy of regional governance priorities (goals) in a social
investment policy scenario. Analysis of the approaches implemented to develop a spatial
development strategy and, as a result, the choice of a regional governance model shows that,
apart from the negative narratives arising in the process of “a dialogue breakdown”, the
economocentrist approach aims to adopt a regional economic growth model in the regional
governance, its line of reasoning being a mobilization modernization scheme, streamlined
financial and administrative control mechanisms, and reduced management costs through
vertically integrated communication in the system of “region-center” relationship. According
to a discussion of possible regional development prospects, the economocentrist approach
insists on adopting the “concentration” formula as a prerequisite for activating the social
investment policy. The ideology and vector of regional governance is based on the principle
of goal-setting implemented through the dirigiste role of the state and, accordingly, the choice
of a regional governance model to ensure efficient use of financial resources.
In the light of the above, it should be noted in the framework of the research that the
formation of a social investment model of regional governance updates the analysis of
conditions, factors, and prospects for regional development based on a consensus of goals
and interests of the regional governance system and actors of regional society. A possibility
of getting out of the stagnation and disproportionate development trajectories of the Russian
regions is associated with the social investment model of regional governance. The
economocentrist approach attempts to solve this problem with reference to the success of
agglomeration schemes in other countries and the “security” of government-regulated
investment.
Being aware of the complexity of formation and development of the social investment
model of regional governance, the social investment approach criteriality is upheld in the
article, including the study of external and internal factors of an incentive or disincentive

nature for implementation of the social investment model of regional governance as an
analytical framework. Based on understanding of the social investment model of regional
governance as a set of methods, stimuli, coordination and cooperation procedures containing
a solution to the current and strategic problems of regional development, a criterion study
scheme is built up containing organizational and regulatory benchmarks (analysis of the
established organizational forms of regional governance and management impact regulators),
subjective activity criteria (analysis of the impact and potential in the implementation of the
social investment model of regional governance, businesses, and intellectual elite as actors of
the regional society), forecasting criteria (the state and deliverables of regional social
investment development projects, scenarios for intraregional and interregional relationship
formation, centralization and decentralization in the implementation of the social investment
model of regional development within the “region-center” relationship).
Since the social investment model of regional governance in Russian context includes the
influence of a vertically integrated system of public administration, while the regional level
combines the national and local governance [11], the article identifies the issue of the margin
of competence (discretion) of the regional governance level, the possibility of partnership of
national governance structures (the level of subsidiarity and interventionism on the part of the
federal government), regional governance (regulatory, administrative, internal integration
methods of management impact), regional society (the level of mobilization of stakeholder
groups in the implementation of regional and local social investment development projects;
approved schemes of interaction with regional authorities).
3. RESEARCH RESULTS
Due to a lack of rental economy in the region, it can be said that transition to the social
investment model is conditional. At the same time, there are difficulties associated with
overcoming the concept of social investment as a matter of business entities themselves.
Since major state corporations do not operate in the region, expectations are placed on small
and medium-sized businesses that are not able to implement social investment projects
independently. Therefore, a chain of managerial interaction of the regional governance
structures, social funds, and business entities has been established. In this context, social
funds do not only act as competitors of the regional governance system [37]. The last five
years’ experience has shown that the priority is implementations of the projects that delegate
certain managerial and supervisory functions to social funds for them to encourage business
entities to invest in the human resource development.
Indeed, if stating that a breakthrough in the region has been achieved at the level of
creating flagship development plants, the problem of a new employee generation coming
therein inevitably arises, which is connected with the implementation of educational and
professional training programs. No less important are public health projects that require
efforts to reduce the risks of alcohol and drug dependability as well as asocial misconduct. In
these terms, the Rostov Region is characterized by an actualization of social (educational)
initiatives.
A limiting role is probably played by sluggish organizational centralization processes and
insufficient embeddedness in the regional governance structure of departments that would be
responsible for the social investment development implementation. The major load is on the
administrative institutions. On the one hand, this gives the advantage of coordinated actions
in the management team, on the other hand, there are problems associated with a lack of new
ideas and identification of new social investment activity niches. Considering that the region
is experiencing problems associated with social adaptation and social protection of the

Macroregion
population (e.g., large families and retirees), administrative institutions are shifted to less
interested social investment projects that are aimed at supporting socially and economically
active segments of the population.
In view of the hardships of economic restructuring and reengineering development,
development plants cannot expand the range of social investment influence; despite an
observed growth in public interest of 32-35% [38] in social investment in personal and family
development, this trend is loosely correlated with the regional governance system. In
particular, administrative institutions have not formed a regional regulatory framework for
increasing the social investment activity of the population. The region has not developed a
legal framework for social lending and has not provided a preferential tax treatment for
economic entities focused on social investment in their employees.
Figure 1 Regulatory/NORMATIVE model of regional governance
It should be emphasized that the genesis and development of the social investment model
of regional governance in the Rostov Region is characterized by asymmetric competence of
the regional authorities and local self-government authorities that experience problems
because of insufficient financial base and ambiguous legal framework reducing interaction
with the regional authorities as a consequence of the “local government authorities’

independence” of the state. In view of these circumstances, the social investment model of
regional governance, even if it ensures the unity of the federal and regional legal framework,
becomes a competitive field of financial flows focused in the context of different vectors of
targeted orientation of regional governance structures and local self-government authorities,
which is confirmed by the problems of social investment development of single-industry
towns in the Rostov Region.
On the whole, it can be said that the social investment model in the Rostov Region
corresponds to its middle position in the regional status hierarchy; typical problems are
identified due to the fact that in a region based on the industrial potential, economic problems
either related to modernization of the current production or to the construction of new
facilities inevitably arise. The other problem is that the regional labor market remains thin
enough to train specialists with advanced knowledge.
Particularly, attempts to train specialists in nanotechnology, biotechnology, and the green
economy have not been in demand in the regional labor market. Hence, the constraining
factor is that the social investment model of regional governance is included in the solution of
topical social problems, which is connected with the reproduction of human resources on a
past basis. There has been neither a breakthrough in improving the quality of human
resources nor formation of a regional governance system to ensure implementation of high-
quality social services. If comparing the governance mechanisms in the Rostov Region and
the Krasnodar Territory, the balance is in favor of the Rostov Region in terms of having a
targeted program to increase the economic attractiveness of the region, while the regional
governance in the Krasnodar Territory is based on the use of the region’s social and territorial
advantages. However, this does not create a competitive effect, since the administrative
leverage in the form of support for the Krasnodar Territory by the federal center is stronger
than in the Rostov Region.
An important external factor is a decline in the politicized protest sentiment in regional
society and its entering the field of satisfaction with the current social situation. Considering
that the Rostov Region is characterized by conventional human resources protection, it can be
said that the social investment model of regional governance is associated with a moderately
upward trend in the quality of life and living standards consistent with the national indicators
of socioeconomic inequality [7].
References to the region’s middle status make it necessary to define the social investment
model of regional governance as an emerging one, which is in its formative stage and is not
characterized by a high social performance. The level of generalized trust in various regional
authorities is differentiated depending on the institution, whereby local authorities and law
enforcement agencies are outsiders (6, pp.154-155). This point is essential to the
understanding that the regional governance system in many respects continues to fail because
of the lack of coordination with local authorities. It should also be clarified that the tendency
to set sights on local government authorities more firmly suggests that administrative
institutions prevail in social issue management.
Regional governance has to eliminate the bottlenecks of local governance, in particular, in
terms of debt redemption (Novocherkassk) and the deployment of senior executives
(Taganrog). It is obvious that administrative institutions retain their dominant position until
the regional governance system is in a state of parity of administrative and social investment
institutions. The established structure is aimed at achieving this goal and at the same time,
within the framework of the social investment model implementation; there are obstacles in
the context of crisis situations, in particular, disputes over social restructuring of the coal
mining segment.

Macroregion
Therein, one can refer to the fact that miners are a human resource of the past, associated
with the industrial economy, which outweighs considerations of social security and control
over the protest potential of the population that is characterized by angst, apathy, and
sometimes aggression. Obviously, it is appropriate for the regional governance to suspend the
social investment model implementation, since it is important to admit the regional
governance underdevelopment statement and to enhance the authority of regional governance
institutions to the level of the institution of the governor [36].
A specific place in the regional governance system is held by inciting the development of
social investment institutions as they enjoy a sufficient level of public confidence. The
Rostov Region administration is characterized by regional indicators that are higher than the
local ones related to the local governance. There is a gap between the trend towards
improving the quality of human resources and the work with local communities, which can
be perceived as the embodiment of conventionalism and inertia.
It is characteristic that the regional governance policy is being adjusted; there is a
transition from the focus on the rural area to urban settlements in the region. It is clear that it
is in cities where high-quality human resources are concentrated. Probably, the experience of
the capital was taken into account when focusing on the regional center (a plan for the
Rostov-on-Don social development implementation in terms of housing construction,
transport infrastructure, and professional training centers). This is a reflection of a certain
positive experience taking into account the regional society configuration.
It is obvious that the Rostov Region’s distinctiveness compared not only to the Krasnodar
Territory but also to the capitals is that its regional governance is characterized by a tendency
to focus on the professional rather than the educational resource. The structure of educational
institutions in the region is well developed, but according to the President, some of them are
just “sheepskin” production laboratories. Evidently, the efforts of regional authorities aimed
at consolidating the positions of the leading regional universities (Don State Technical
University and Southern Federal University) are related to the region taking the leading
positions in terms of access to quality education, which dramatically increases the
attractiveness of human resources.
Indeed, compared with the other Russian knowledge-intensive regions, the Rostov
Region, although remaining the leader in these positions in the regional terms, has partly lost
its knowledge-based capital and has averaged its higher education; yet, there is no dramatic
degradation and there is expanded access to educational resources. However, educational
institutions have given ground in education and science in the Russian sociocultural space. It
should be highlighted that the identified problems of the local self-governance development
and of increasing the educational resource significance are priority tasks where positive
results have been achieved.
Speaking about the prospects of the social investment model of regional governance, one
should pay attention to the increased activity of regional governance in the industrial and
transport sector development. The projects implemented in the logistic and economic fields
have an obviously positive effect on improving the quality of regional governance where the
current management team has taken the initiative. Acknowledging that social investment
institutions operate mainly in the sphere of small and medium-sized business, one can speak
about the prospect of differentiating social investment institutions both at the level of
governmental projects and public-private partnerships. In the former case, it is about
encouraging major Russian players’ entry to the region, which can be observed through the
example of the Platov airport, and in the latter case, in the focus on developing investment
activity of regional business entities. The previously mentioned difficulties can be overcome

following the creation of a competitive environment for the promotion and implementation of
social investment projects [13].
According to Russian economist G. Kleiner, if to take into account the adopted strategy of
socioeconomic development until 2030, it is important for the South-Russian Region to
understand three essential aspects. First, this is the regional strategy inclusion in the system of
multilevel and multi-faceted strategic planning and management, whereby the strategy of
each economic entity should become part of a network structure nationwide. Second, the
regional context that takes into account the region’s history, the psychological types of its
residents, its vision of the future, and its integration into the overall national Russian strategy.
Third, this is a transition from manual planning to a competitive strategy that would cover not
only development zones but also the population; otherwise, a third of the population would
not enjoy any advantages upon new development strategies adoption [5].
Thus, a detached view implies that a successful spatial development is impossible in
Russia if the regional strategies developed in the regional governance system cannot be
coordinated nationwide. Based on this obvious statement, it can be said that the transition to
the social investment model in the South-Russian Region is rather isolated and spontaneous,
with a gap between participation in federal target programs and the regional authorities’
proclivity for social investment activity.
This circumstance is hardly ever taken into account in the regional governance system
because administrative institutions are concerned with supporting small and medium-sized
businesses and aim to accept projects solely against guarantees of creditworthiness and credit
reimbursability. Thereby, a lendee’s desire to invest in human resources is limited, since it
would not provide immediate returns and can increase the risks of non-competitiveness under
tight credit terms. While noting disproportions between large, medium-sized, and small
enterprises in the South-Russian Region, in particular in the Rostov Region, it is possible,
according to G. Kleiner’s position, to think about how to ensure a transition from one sector
to another. This is an important point for the regional governance system, since they it is not
accustomed to working with indicative planning.
While noting that the social investment development model has great chances of being
embedded in the context of work with large economic entities, it is obvious that in order to
develop the South-Russian Region, a model elaborated in the extractive regions is to be
applied, whereby large corporations are major taxpayers and ensure social growth. However,
it should be borne in mind that development zones cannot follow the principle of the large
corporation model, since the resource-based economy has a different orientation than the
production economy. It is understood that the extractive regions, being major taxpayers to the
federal budget, reflect the model conservation on the whole, whereby the majority of federal
taxes (50-60%) is accounted for the base material sector.
However, when it comes to the prospects for social investment development of the South-
Russian Region, it should be noted that in the framework of economic development programs
implemented in the region, the human resource factor should be taken into consideration as
that comprising the prospect of accelerated development of the region. There has been a shift
towards improving the quality of human resources in the conventional industrial sector;
where to the formation of professional retraining systems is related, in the Rostov Region
administration. However, smart technologies that require investment in education are not
included at a sufficient level.

Macroregion
Figure 2 Regional academic potential development management structure
This scheme implementation in the context of the South-Russian Region and the Rostov
Region characterized by a high academic potential enjoys preferences in the established
research activity specialization (computer science, biotechnology, nanotechnology, ecology)
but is affected by immature intellectual property market barriers and the dominance of
intellectual services tied to short-term contracts. At the same time, the regional academic
potential does not convert into investment potential, since educational activity is
“overlooked” by the regional administration institutions and is reduced to the professional
education and retraining.
It is obvious that fixation on the industrial sector rehabilitation, with subsequent transition
to development zones, is constrained because of enterprises engaged in technological re-
equipment and struggling to prioritize social investment programs. Moreover, one should not
talk about a return to the previous development zone load model. According to G. Kleiner, it
is more appropriate to apply the performance criterion to the performance of enterprises
rather than to the socioeconomic development strategy. Most significantly, it is referred to a
strategy quality, which is consistent with the social investment model as a model aimed at
improving the quality of human resources. In these terms, the emphasis on the fact that
citizens should be engaged in small and medium-sized business is to a certain extent contrary
to the social investment model. Excluding total encouragement of small and medium-sized
businesses, as a matter of experience of forming a social investment model of regional
governance in the South-Russian Region, one can talk about encouraging small and medium-
sized businesses that contain innovation growth points, particularly in IT and logistics, and
the possibility to develop economic networks across the region as a whole.
In other words, small and medium-sized businesses are of social investment nature if they
meet the criteria of social investment in employees, implement constructive expansion
programs, create employment opportunities going beyond the localized framework, and use
highly qualified human resources. This is a complex challenge as the regional infrastructure,
generally obsolete, is characterized by gaps between the regional center and middle cities, the

main interest in which manifests in the social investment model implementation, and the
underdevelopment and potentially depopulated territory the east of the region appears to be.
Territorial gaps within the South-Russian Region are no less painful than gaps in the all-
Russian space. Therefore, it is important to implement a cooperative development model in
the regional governance system, that is quite likely associated with previous experience of
social patronage and guardianship; that is, investing resources in the development of
territories in order to train high potential staff and allocate recreation zones or auxiliary
economic development zones in these areas. This refers to the creation of associated bodies
where workers would be able to use a benefits package and to have access to quality nutrition
and recreation.
Figure 3 Regional socioeconomic system. Capacity to influence the social investment model of
regional governance
The regional governance has formed a strategizing platform, which reflects in an attempt
to update the economic growth fueling through the rehabilitation of conventional industrial
sectors and institutional support for social investors. However, these goals are not
coordinated and reproduce a collision of interests on the part of lobbying regional groups, in
particular, business and sub-regional “clans”. It is obvious that the presented confuses self-
organization processes associated with the initiative of regional community actors, which is
quite a low indicator for the Rostov Region and does not take into account the level of intra-
regional competition that is far from being an “ideal” cooperation within the region. As for
interregional competition in the context of the existing transfer system, competitive indicators
are concentrated to attract resources for economic megaprojects implementation and result in

Macroregion
an asymmetric social investment environment and development of the federal center
resources.
While noting that the social investment model of the regional governance in the South-
Russian Region is determined by updated administrative leverage consolidating the team and
enhancing the governor authority, it can be noted at the same time that within the framework
of social investment projects that are inseparable from development zone planning, certain
challenges are identified, as well as the fact that the South-Russian Region is consistently
behind to the extractive regions in the regional status hierarchy [3].
The Rostov Region’s middle status, on the one hand, is a contributor to its stable position
with the federal center when attention is paid either to the leaders or those lagging behind; on
the other hand, there are difficulties in transferring to the social investment development
model in the context of socially evolutive practices. The point is that creation of employment
as well as optimization of the higher education quality improvement is undoubtedly included
in an extended area of responsibility of regional governance. This is an opportunity to move
towards consistent regular work to strengthen the social investment management model.
As mentioned above, the undifferentiated social investment institutions and the lack of
strategic development funds involved in social investment development strategies establish a
precedent for deferred expectations. The Rostov Region is unlikely to come in top place
among the leading regions over the next 5-10 years, since a larger timeframe is required for
the implementation of regional development projects. Also, the possibility of restrict the
transfer model influence affects the expectations. Under these conditions, regional authorities
are reluctant to take on the risk of expanding responsibility, especially given the region’s lack
of a sufficient safety margin to endure crisis situations.
Financial resources in the region are used to the purposes specified, are associated with
investment in the social infrastructure maintenance and are not intended for a social lending
cycle. In the system of regional governance there is a shortage of transfers to the low-
performing areas, hence, the fact that the regional governance actors focus on improving the
regional center status are understandable. On the one hand, an attractive investment
background is created in the region to be displayed; on the other hand, the regional center is
easy to monitor due to the concentration of human resources and the possibility of their rapid
assessment. International practices of implementing the social investment model of regional
governance suggests that in order to ensure effective social investment activities, there has to
be a request for transformative planning, searching, and selecting projects that would reflect
the capacity of regional governance to monitor changes in order to evaluate project
performance and not to engage in “designing without a result” [21].
As mentioned above, the experience of the capitals is being adopted to some extent or
another in order to make the regional center a regional growth powerhouse. At the same time,
mistakes associated with depopulation and degradation of the adjacent territories have been
repeated. In one of his speeches, the President of the Russian Federation emphasized the need
for even spatial development, for the creation of a developed transport infrastructure, and for
the social infrastructure deconcentration, in particular, medical institutions.
4. DISCUSSION
Obviously, the previous stage of regional governance resource concentration had the optimal
effect in the form of establishing new medical centers, highway engineering, and housing
construction in regional entities and, at the same time, resulted in degradation of human
resources in the adjacent areas referred to as periphery. Therefore, the social investment

model of regional governance needs to be adjusted in the near future so that social investment
is not localized and not formed by diverting resources from remote areas.
When forecasting the prospects for the social investment model of regional governance in
the Rostov Region, it can be said that social investment will shift towards a more even
distribution by saving human resources in order not to bring about a chain reaction of
regional space disintegration. The problem is that over the past two decades, peripheral areas
have lost a significant part of their human potential and a long time is required to overcome
the social and socio-demographic imbalances, which conflicts with the current priorities of
accelerated regional development [35].
In this context, it seems worthwhile to establish horizontal cooperation ties with the
Krasnodar Territory in the framework of promoting common agricultural projects. Obviously,
it is necessary to eliminate the toxic intra-regional competition ranging from being involved
in non-constructive bargaining over receiving financial transfers from the center to an
expansion in the interregional space, which has socially dumping implications for the
development of the South-Russian Region as a whole.
The use of a project leadership model in regional governance appears to be viable; it was
proposed by Finnish researchers A. Thorkildsen, M. Kaulio, and M. Ekman who note that
there is no perfect choice for regional governance if efforts in the framework of social
investment policy are only concentrated on debating the scope of control from potential
partners, since the social investment policy faces both vertical “challenges”, that is, the range
of interventionism from the center, and horizontal ones, such as “unsound” competition in
terms of assuming the management functions and organization of social investment activities
[31].
At the same time, it should be borne in mind that, as shown by foreign regional studies,
economic development cannot be advanced if it is not associated with social “prosperity”
[22]. It is also relevant to comprehend the regional governance system “failures” while
uncritically borrowing neoliberal schemes that rely on business encouragement through direct
public investment in the regional social development [30].
Thus, it can be concluded that in the South-Russian Region, if to take the Rostov Region
as a middle region, the social investment model formation can be assessed as starting. In the
context of a search for improving the quality of human resources in the regional governance
system, it can be noted that the administrative institutional structure reproduction has a
positive effect in the context of micromanagement to eliminate bottlenecks in the regional
society governance development and requires a switch to adopting a social investment
institution model in the future.
According to the analysis findings, the Rostov Region development is hindered by
internal regional competition and the underdeveloped intraregional cooperation that would be
positively influenced to a certain extent through achieving a state of affiliation between the
Rostov Region and the Krasnodar Territory. Otherwise, there is an effect of excess
competition duplication associated with an outflow of human resources, credit facilities, and
implementation of development zones.
5. CONCLUSION
The regional governance in the Rostov Region is undoubtedly experiencing a lagging effect,
since the past stagnation period has led to deterioration in the quality of human resources
associated with their outflow from the regional capital and to the Krasnodar Territory. It
should also be noted that in the regional governance system there was a rather painful period

Macroregion
of a new management team’s assumption of power, whereby a distance between the newly
appointed managers and the regional elites was an obstacle [39].
Streamlining the regional governance system in the Rostov Region has led to a lack of
attention paid to socioeconomic development of the districts and cities of the region and, in
spite of intensified efforts to increase the region’s investment attractiveness over the past five
years, there have been basically no fundamental changes for the better. This pattern can be
also traced with reference to other middle regions of the Russian Federation where, despite
calls for taking into account their specific profiles, obviously ambitious respective
performance criteria rather than quality criteria of the regional development model are often
developed [34].
In the regional administration system of the Rostov Region, the background is evidently
imbalanced in favor of professional administrators. Filling the vacuum in social investment
through attracting social funds would improve the sphere of social resource reproduction, but
real progress is possible by way of eliminating imbalances in the intraregional space and the
regional administration institutions taking efforts to ensure the parity development of the
regional center and the remote areas of the region. In these terms, no quantum leap has yet
been observed, although at the level of the Rostov agglomeration development, it is possible
to speak of its positive effect on a more even distribution of human resources.
The social investment model formed in the Rostov Region went through a period of social
coordination and has been legitimized as a regional chain of command. To activate social
investment governance mechanisms for handling major strategic challenges, a gradual
personnel revolution and formation of specialized social investment structures that would
perform social, coordination, and social development functions in the system of regional
governance are required
REFERENCES
[1] Atamanchuk, G. V. Management in the life of people. Moscow, 2008.
[2] Batanov, A. S. The role of civil society institutions and the potential of the human person
as increasing factors to accelerate the socio-economic development of Russia. Moscow,
2005.
[3] Volkov, Yu. G., Barkov, F. A., Vereshchagina, A. V., and Chernous, V. V. Middle class
in the Rostov region: behavioral strategies, attitudes and social resources of development.
Humanitarian of South Russia, 2015.
[4] Gavrilov, A. I. Regional economy and management. Moscow, 2002.
[5] Each strategy is like a soul - it is individual. Expert, 10, 2018.
[6] Krivopuskov, V. V. Confidence in the Russian society in the post-Soviet period: dynamic
characteristic. Humanitarian Scientist of the South of Russia, 2013.
[7] Peace to the Caucasus. 2014.
[8] Nesterova, N. N. Specificity of the organization of the activities of executive authorities
in the region. TSU Bulletin, 11, 2012.
[9] Afanasiev, M. N. Dynamics of conflicts in the ruling regional groups. Authority, 9, 1997.
[10] The paths of Russia: existing restrictions and possible options. Moscow, 2004
[11] Regional Sociology in Russia. Moscow, 2007.
[12] Samygin, S. I., Vereshchagina, A. V., and Rachipa, A. V. Financial security of the state in
the context of economic globalization: Specificity of risks and threats. Humanitarian
Scientist of the South of Russia, 2016.

[13] Skorobogaty, P. and Khazbiev, A. Return Russia to the power of the USSR. Expert, 18,
2018.
[14] The middle class in modern Russia experience of long-term studies. Moscow, 2016.
[15] Capitals and regions in modern Russia: myths and reality fifteen years later. Moscow,
2018.
[16] Strategies of Macro-Regions of Russia: Methodological Approaches, Priorities, and Ways
to Implement. Science, Moscow, 2004.
[17] Tikhonov, A. V. Epistemological status of sociological knowledge and some problems of
intrascientific reflection in Russian sociology. Russia undergoing reform. Moscow, 2007.
[18] Kharchenko, K. V. Program-targeted regulation: problems and innovations. Municipal
Government Practice, 4, 2013.
[19] Addie, J. P. D. and Keil, R. Real Existing Regionalism: The Region between Talk,
Territory and Technology. International Journal of Urban and Regional Research, 39(2),
2015, pp.407-417.
[20] Berck, P., Tano, S., and Westerlund, O. Regional Sorting of Human Capital: The Choice
of Location among Young Adults. Sweden Regional Studies, 50(5), 2016, pp.757-770.
[21] Filion, P., Kramer, A., and Sands, G. Recentralization as an Alternative to Urban
Dispersion: Transformative Planning in a Neoliberal Societal Context. International
Journal of Urban and Regional Research, 40(3), 2016, pp.658-678.
[22] Fritz, M. and Koch, M. Economic development and prosperity patterns around the world:
Structural challenges for a global steady-state economy Global Environmental Change.
2016.
[23] Lubinski, D. From Terman to Today: A Century of Findings on Intellectual Precocity.
Review of Educational Research, 86(4), pp.900-944.
[24] Martynovich, M. and Lundquist, K. J. Technological Change and Geographical
Reallocation of Labour: On the Role of Leading Industries. Regional Studies, 50(10),
2016, pp.1633-1647.
[25] Mérida, A. L., Carmona, M., Congregado, E., and Golpe, A. A. Exploring the regional
distribution of tourism and the extent to which there is convergence. Tourism
Management, 57, 2016, pp.225-233.
[26] Puciato, D. Attractiveness of municipalities in South-Western Poland as determinants for
hotel chain investments. Tourism Management, 57, 2016, pp.245-256.
[27] Rogers, R., Schaenen, I., Schott, C., Starkey, K., and Chasteen, C. C. Critical Discourse
Analysis in Education: A Review of the Literature, 2004 to 2012. Review of Educational
Research, 86(4), 2016, pp.1192-1226.
[28] Schmidt, T.S. and Huenteler, J. Anticipating industry localization effects of clean
technology deployment policies in developing countries. Global Environmental Change,
2016.
[29] Schröder, M. and Voelzkow, H. Varieties of Regulation: How to Combine Sectoral,
Regional and National Levels. Regional Studies, 50(1), 2016, pp.7-19.
[30] Sultana, F. Governance Failures in Neoliberal Times. International Journal of Urban and
Regional Research, 39(5), 2015, pp.1047-1048.
[31] Thorkildsen, A., Kaulio, M., and Ekman, M. Project leadership in regional development
coalitions: Horizontal and vertical challenges of trustkeeping. European Urban and
Regional Studies, 22(4), 2015, pp.383-397.
[32] Thurlings, M., Evers, A. T., and Vermeulen, M. Toward a Model of Explaining Teachers’
Innovative Behavior: A Literature Review. Review of Educational Research, 85(3), 2015,
pp.430-471.

Macroregion
[33] Thurlings, M., Evers, A.T., and Vermeulen, M. Toward a Model of Explaining Teachers’
Innovative Behavior: A Literature Review. Review of Educational Research, 85(3), 2015,
pp.430-471.
[34] http://e-notabene.ru/etc/article_20499.html
[35] http://rostov.gks.ru/wps/wcm/connect/rosstat_ts/rostov/ru/municipal_statistics/main_indic
ators/
[36] http://tgpi.ru/news/10-09-2015/1
[37] http://www.donland.ru/Donland/Pages/View.aspx?pageid=124053&mid=128713&itemId
=127114
[38] http://www.rostov-gorod.ru/index/news/8/690405/
[39] http://zampolit.com/dossier/golubev-vasiliy-yurevich/
[40] http://www.donland.ru/news/Vasilijj-Golubev-vstretilsya-s-uchastnikami-konkursa-
Lidery-Rossii?pageid=92218&ItemID=82802&mid=83793

SOCIAL INVESTMENT MODEL OF REGIONAL GOVERNANCE: DEVELOPMENT PROSPECTS FOR THE SOUTH-RUSSIAN MACROREGION

Recommended

Recommended

More Related Content

What's hot

What's hot (7)

Similar to SOCIAL INVESTMENT MODEL OF REGIONAL GOVERNANCE: DEVELOPMENT PROSPECTS FOR THE SOUTH-RUSSIAN MACROREGION

Similar to SOCIAL INVESTMENT MODEL OF REGIONAL GOVERNANCE: DEVELOPMENT PROSPECTS FOR THE SOUTH-RUSSIAN MACROREGION (20)

More from IAEME Publication

More from IAEME Publication (20)

Recently uploaded

Recently uploaded (20)

SOCIAL INVESTMENT MODEL OF REGIONAL GOVERNANCE: DEVELOPMENT PROSPECTS FOR THE SOUTH-RUSSIAN MACROREGION