Local self-government: theory and practice based on the institutional approach

The article is devoted to the analysis of the phenomenon of local self-governing, with a new institutional theory being the basis of the analysis. The article analyses the institutional costs of local authorities in small towns and regions when they perform their functions. These costs are, in most cases, unproductive, which make the work of the municipal governments worse.The author introduces a new term “unproductive institutional costs” and proposes their genetics classification.