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Today, the leading world powers define the construction of a social state as a priority direction for their development. Authorities are expanding their social and economic obligations that will be financed at the expense of means of budgets of various levels. However, the revenue part of the budget is not growing at such a rapid pace, which leads to a budget deficit and calls into question the implementation of the increased social obligations assumed. This situation has not only economic but also political consequences. It may lead to increased social tension and expressions of distrust of the current government. In this regard, it is necessary to find new tools and mechanisms for financing social obligations of the state, to attract financial resources of private investors in the provision of social services. Introduce market mechanisms in the management of public services, thereby reformatting the very concept of state and municipal management. For a long time, it was considered that financial management tools are not applicable in the public and municipal sectors. However, the "efficiency" and "effectiveness" criteria widely used in the private sector can be used to evaluate the performance of public authorities and control budget spending. A promising mechanism for transforming the role of the state in the economy and strengthening private initiative can be public-private partnership (hereinafter – PPP), which can be considered as a voluntary Union of the public and private sectors in the implementation of social investment projects that stimulate the solution of national tasks. Unfortunately, even today there is no unified approach to determining the essence of this phenomenon and its characteristic features. All this makes it difficult to implement this mechanism in practice. Creating a legal Foundation and institutionalizing the main forms of such cooperation will contribute to the formation of social partnership and the development of civil society in Russia. In addition, expanding the scope and intensity of PPPs in the economy will increase the investment attractiveness of the territory and the development of the private sector, which will have a positive impact on the quality of life of the population.

Public-Private Partnership-Institute of Socially Oriented Economy and Democratic Management System