Economic Integration and Dvelopment of Local Public Sector in Serbia

In today societies the local public sector is getting increasingly important role in countries´ sustainable development. The sustainable development assumes close interrelation and specific balance between economy, society and environment. It implies balanced development of the economy and society with simultaneous careful exploitation of limited natural resources and preservation of the environment. In such a general framework the local public sector is becoming one of the key agents of this complex process. Nowadays approach to the management of economic development is increasingly shifting from traditional and centralized to the local level. In the continuous struggle for economic resources needed for economic development, the market competition include variety of players: the businesses compete with other businesses, the central governments with other central governments, and in the same way in this process are including local governments which compete with other local governments. In the chapter are presented some of the most relevant experiences of the local public sector involvement in the economic development in the developed countries, and the analogy and comparison with the present situation in Serbia is made. In the last part of the chapter the major assumptions necessary to create efficient and effective local economic development are elaborated and the present situation regarding each of the specified assumptions is presented and evaluated.