Effective financial management in conditions of decentralization

Abstract

The article is devoted to the study of decentralization's role in improving public finance management. Theprocess of decentralization, which involves the transfer of powers and responsibilities from central to local authorities, is aglobal trend aimed at improving governance, public service delivery, and local economic development by bringing thedecision-making process closer to communities. The article emphasizes that effective financial management, includingbudgeting, debt management, revenue generation, and transparent reporting, enables local governments to meetcommunity needs, maintain fiscal stability, and ensure accountability. The article examines vital legislative reforms inUkraine that have expanded the powers of local authorities, giving them greater control over budgets, taxes, and financialresources. Although decentralization offers significant opportunities, the study identifies challenges such as regionaldisparities, administrative constraints, and conflicts between central and local governments. Potential challenges confirmthe importance of institutional frameworks, financial resources, technological integration, and citizen participation toensure a successful decentralization process. Thanks to reliable financial practices and transparent management, localauthorities can improve the quality of public services and contribute to the state's economic growth and sustainabledevelopment.