The purpose of this article is to establish the social and/or economic impact of the implemented Cohesion Fund (CF) projects on development of regions of Latvia. Three tasks are addressed to achieve this goal - to study CF projects by regions; analyse distribution of funding by sectors of economy and their compliance with CF objectives; to draft recommendations for improving the absorption of funds and achieving the goals of the European Union (EU) regional policy. The article consists of three chapters, an introduction and conclusions. New scientifically grounded recommendations are developed for improving socio-economic impact of the CF in Latvia. The key recommendation relates to the EU involvement in dealing with problems of increase in costs, namely - by proving that the increase in costs affects several of the new EU member states or Community regions, the EC will have to take part in addressing the problem. Further assessment of the socio-economic impact of the CF on development of regions of Latvia requires additional research.

In the EU funds planning period 2004 - 2006 in total 1141.44 million Euros have been allocated to Latvian national economy. The most part of financing was assigned to the development of infrastructure, development of entrepreneurship and innovation and human resources. Analysing division of the Structural Funds allocation between the regions, most part of the Structural Funds financing of 2004 - 2006 - 49.52% from all the financing has been allocated to the Riga region. That points to unequal division because Riga region has three times bigger Gross Domestic Product then Latgale region. Direct link to the social economic indexes indicating the development of the region and attracted EU funds financing can be surveyed - most developed regions have received most important part of the financing and underdeveloped regions the smallest part. EU funds regional support has to be planned and there should be regional development policy in EU funds distribution. Possible means to endorse the development of the undeveloped regions of the country by support programmes include creating specific support programmes, giving larger aid intensity for projects from regions, consultation work in project development and implementation and other ways.

The study summarises the theoretical and legal aspects of the main types of area payments in Latvia. From the point of view of theoretical and legal arrangements, the area payments may be broken down in two large groups: direct payments and area payments foreseen under Rural Development Programs. The legal package regulating Area Payments consists of the EU regulatory enactments (Council or Commission Regulations) and regulatory enactments of Latvia (Laws and the Cabinet (MK) Regulations). The institutional implementation system of each group of Area Payments is relevant and distinct. The present study analyses 11 different types of Area Payments. Over the period 2004 - 2007, farmers have received LVL 430 million in different Area Payments constituting 58.5% of the total amount of support.

Latvia is a territorially small country with small open economy, and its main and the most competitive recourses are highly educated society and well developed science which is based on research, innovation and modern technologies. To create a well functioning innovation system as a part of knowledge-based economy, several conditions has to be met to insure that all parts of national innovation system effectively work together. This article is dedicated to analysis of financing mechanisms that can be used by research institutes in the field of agriculture in Latvia to ensure sustainable rural development. The research in the field of agriculture in Latvia is mainly performed by the state research institutes and research agencies of Latvia University of Agriculture. To provide favourable environment for development of research and science, there is set legislation framework and financing mechanisms such as base financing from the state budget, state research programmes, European Commission Framework Programmes, and the European Union (EU) Structural Funds assistance. The analysis has shown that support of EU Structural funds has positive impact on number of applied research carried out in research institutes in the field of agriculture in Latvia. EU Structural funds assistance helps to develop fundamental research activities and innovative approach to the science that is one of the preconditions for the development of states' competitiveness. In conclusion, the authors resume that it is necessary to establish a strong link between higher education institutions, research institutes, and entrepreneurs in the process of building effectively working national innovation system.

Despite Latvia being a small country, it bears marked territorial or regional differences both between smaller administrative territorial units (local municipalities, republican cities and districts) and between larger territories – regions. From 2004 till 2008 Riga received 50% of all European Union (EU) funding. Latgale received the smallest part of financing (10%); the rest of the funding was split almost equally among Zemgale (12%), Vidzeme (12%) and Kurzeme (13%). As specific tasks for the development of specific territories or a balanced distribution of financing were not put forward for the strategy of acquiring funds, the fund investment has been attracted only to those territories where the yield could be the biggest or where the absorption capacity was the highest.

The social enterprise features are well known in the world history while in Latvia there is a lack of studies and understanding about it. The aim of the research paper is to study the influencing factors of social entrepreneurship in Latvia. In the research the essence of social entrepreneurship and the main principles for definition of social enterprises – social mission, business orientation and involvement of marginalized groups are described. The analysis to determine the most important internal and external factors influencing development of social entrepreneurship was carried out. It was found out that the main external factors are political and legal environment, lack of knowledge about significance of social entrepreneurship, dominating values in society and such internal factors as access to finances, recruitment of professional and well motivated personnel.

The European Union (EU) Common Agricultural Policy (CAP) affects the development of the agricultural industry and rural areas in all the Member States. A very important role is played by various support payments as one of the policy instruments. The CAP has been developing and is being reformed; therefore, it is important to assess the effect of various CAP support instruments on the development of the agricultural industry. Therefore, the research aim is to assess the support instruments and kinds of support as well as their effects on selected agricultural indicators. The research study proceeds in three stages or phases: first, the identification of the total amount of support payments paid and the key kinds of support; second, a detailed analysis of the key kinds of support; third, the identification of associations between the amounts of support payments and other agricultural and farm performance indicators. The research found that in the period 2005 – 2014 in Latvia, the total amount of support amounted to EUR 4.3 billion, of which EUR 520 million or 12% were received by approximately 1000 FADN farms. The most significant kinds of financial support in Latvia were direct payments, accounting for 47% of the total amount of support and financial assistance provided for rural development with 39%. The total amount of financial support and the amount of area-based payments affected the key agricultural indicators as well.

After the private ownership of land was restored and a part of land reclamation structures was given to land owners, the intensity of land use has changed. In the areas of Lithuania, which are less favoured for agriculture, the land is not intensely used. Further financing of land reclamation of such areas from the state budget grants is economically inefficient as the return of relatively high investments is very low. With the changing of land reclamation infrastructure it is necessary to prepare measures which would facilitate rational, regional agricultural specialization corresponding to natural conditions. The routine procedure of financing the land reclamation has to be changed as well. The paper analyses the changes in usage of drained land areas and financing of the land reclamation sector in Lithuania during the last decade (1997-2007). The purpose of this research is to establish the criteria of the economical efficiency of drainage systems and to propose methods how to change the financing of state-owned land reclamation infrastructure. On the grounds of the carried out situation analysis, a methodology of distributing state grants for land reclamation to municipality budgets are presented. To have an efficient use of the state budget funds, the operation and maintenance of shared land reclamation systems have to be carried out according to the maintenance plans approved by municipalities, which would provide for arrangements and compensations due to conflict of interests arising when land plots are used in different ways. Possible ecological measures that could be applied when carrying out repair and reconstruction of drainage systems are discussed.

The paper deals with statistic analysis of the relation between variables of cultural heritage and that of regional development in Latgale region. Latgale was selected as the study area - it is one of the five cultural or historical ethnographic regions of Latvia with stable original features, which are formed in the result of the specific historical processes but stands out among other regions of Latvia with the lowest indicators of development. According to the results of analysis of correlation, the number of architectural and archaeological monuments per 1000 people or their density in area have no close correlation with the major part of the parameters under examination. The analysis of regression was carried out between 'the number of architectural monuments against the area', and 'the natural logarithm from the density of population in 2005'. The ratio is expressed by the function y = 0.0339x**2 - 0.1422x + 0.1671, where y is the number of architectural monuments per square kilometre, but x - natural logarithm from the density of population (the number of people per square kilometre). The coefficient of determination for this relation is almost the same as for a functional one - 0.9499. Both for the coefficients of the equation and free member of equation have very high validity (t - empirical respectively 21.7; -11.1; 7.9).

The paper is aimed at the assessment of opportunities for the financing of innovative activities in Latgale region. The analysis is based generally on the case of Rezekne. Firstly, the problem is determined - Latgale is the weakest region in Latvia from economical development point of view. Secondly, the overview of the financial resources for innovative activities is given. Finally, the author argues his opinion on necessity to develop innovative business in order to improve the situation in Latgale. One of the most important aspects that hamper Latgale's development is the lack of financial resources. The optimal schemes for the financing of innovative business are offered. The research lead to the conclusion that finances for sustainable development of innovative business could be attracted through the Latgale's small enterprises (SMEs) cooperation with regional higher education institutions (Rezekne Higher Education Institution, Daugavpils University), business support centres and Rezekne Special economical zone structures.