The article provides a comprehensive comparative analysis of the fiscal decentralizatio mechanism in Ukraine and the European Union countries, with a focus on its impact on the financial capacity of local self-government. It is substantiated that fiscal decentralization is a key instrument for ensuring sustainable socio-economic development of territories, as it determines the level of budgetary autonomy, the stability of local budget revenues, and the ability of territorial communities to perform their own and delegated functions effectively. The current state and dynamics of fiscal decentralization in Ukraine during 2022–2024 are analyzed, taking into account the influence of martial law and war-related challenges on the structure of local budget revenues and the degree of dependence on interbudgetary transfers. The study conducts a comparative assessment of key quantitative indicators of fiscal decentralization in Ukraine and selected EU countries, including the share of local budgets in the consolidated public budget, the proportion of own-source revenues, the role of intergovernmental transfers, and the level of tax autonomy of local authorities. The results demonstrate that EU countries are characterized by higher financial stability of local governments, a greater share of own revenues, and more effective fiscal equalization mechanisms. Based on the analysis, quantitative benchmarks for adapting European fiscal decentralization practices to the Ukrainian context are proposed, aimed at strengthening the financial capacity of territorial communities. The findings may be used in shaping public finance policy, particularly in the context of European integration and post-war recovery of Ukraine.
Decentralization of fiscal policy is a key factor in the formation of financial independence of local governments and strengthening the economic stability of regions in modern democratic states. Its relevance for Ukraine is determined by the need to strengthen the financial basis of territorial communities in the process of implementing administrative-territorial reform. The purpose of the study is to determine the decentralization of fiscal policy as a mandatory condition for obtaining an independent status of local communities; the object is the system of intergovernmental relations in democratic states. The methodological basis is comparative-legal and quantitative-analytical approaches, based on official statistical data Open Budget, World Bank Boost Data, the Ministry of Finance of Ukraine and the State Statistics Service. The results of the study showed that in 2018–2024 the share of income without transfers, tax revenues and own resources of communities increased, which confirms the increase in the level of fiscal autonomy. Legislative amendments to the Budget Code ensured the expansion of local revenue sources, the introduction of basic and reverse subsidy mechanisms and the strengthening of horizontal equalization. It was found that the Ukrainian model of fiscal decentralization is gradually approaching European practices, forming institutional prerequisites for the sustainable development of communities and strengthening their financial independence.
The fields of education, science, and sports are fundamental pillars of social infrastructure and represent a priority direction of Ukraine’s budget policy, especially in the context of ongoing decentralization and post-crisis recovery. The aim of this study is to examine the principles of funding for public institutions in these sectors based on assessments and analysis of short-term trends in their financing from the general fund of the State budget. The study presents the structure and management of budget expenditures in accordance with the provisions of the Budget Code of Ukraine, with particular emphasis on examples of institutions in the Odesa region for the period from 2022 to 2024. Methodologically, the study employs a combination of comparative analysis, synthesis, generalization, and methods of logical reasoning (induction and deduction), scientific research methods, and the tabular method. Budget data for local and regional institutions, including educational institutions, research organizations, and municipal sports enterprises, are analyzed to assess funding trends and identify systemic patterns. The study results show an overall positive trend in the increase of funding for education, science, and sports at the regional level. However, the analysis also reveals uneven community development: while some receive considerably larger expenditures to support infrastructure development and program expansion, others exhibit slower but more stable growth, likely due to differences in institutional maturity or strategic planning capacity. In particular, the sharp rise in expenditures for sports facilities in smaller communities may indicate deliberate government efforts to promote inclusive development and the decentralization of public services. The practical significance of the study lies in its potential to inform policymakers and local administrators about the effectiveness and fairness of existing budget allocation mechanisms. The study highlights the importance of improving the efficiency and transparency of government expenditures, enhancing planning tools, and aligning budget policy with the actual needs and capacities of local institutions.
The article examines the relationship between the process of financial decentralization and the stability of the development function of regional economic systems based on the interdependence of these components of social transformation. After all, the motivational determinism of local finances activates the process of creating new jobs through the formation of the investment attractiveness of a particular region, the innovative progress of broad segments of the population, and the coordination of business, society, and subnational public authorities. The article reveals that the revival of the economy at the spatial level should be based primarily on the activation of innovative activities in the production and infrastructure sectors. Despite the decentralization of power functions, institutional bottlenecks, and the challenges and threats of decentralization, we believe that inclusiveness is quite high and is not conditioned by state regulation. The article states that the strengthening of the role of territorial communities gives rise to the need to reassess the place and function of each region in the coordinate system of the economic space, which must make institutional decisions that provide conditions for further development. Decentralization opens huge opportunities for the development of clusters of agro-industrial parks but provides an inclusive way for the development of the spatial economy, leveling the existing asymmetry and ensuring decent working and living conditions for the rural population. Proof of this is the EU agro-industrial complex, which convincingly confirms that land management within the framework of the Common Agricultural Policy of the third millennium means much more than food security and export growth, as this cannot be achieved without the simultaneous inclusiveness of sustainable development. A sound strategy for the development of a single national land community through the creation of industrial complexes and the integration of regional economic systems will allow us to move away from budgetary materialism to a paradigmatic strategy of financing spatial development and economic accumulation.
Анатолій Карпук, Vasyl A. Holian, Rostyslav A. Butsenko
It is substantiated that the main capital of forestry economy includes the technical-technological, production-economic and natural-resource components, which requires the formation of a modern model of ecological and economic regulation of its reproduction to prevent the processes of exhausting and unbalanced forest use. It is determined that at the present moment the decisive influence on the paces, proportions and scale of reproduction of the main capital of forestry economy is exercised by the processes of European integration, digitalization and decentralization, which to some extent is reflected in the State Strategy for Forest Management of Ukraine until 2035. Studies have shown that in 2013–2021 in the dynamics of most articles of capital expenditures for the purchase of production equipment, cars, devices, machinery and mechanisms, there is an upward trend, owing to both the real growth of capital investments and devaluation-inflationary processes. It is revealed that in 2013–2021 there is a reduction in total capital expenditures for the purchase of road construction equipment, which reduces the ability of permanent forest users to develop a network of forestry roads. It is substantiated that deepening the digital transformation of the forest management system and the movement of forest products requires an increase in capital expenditures in the acquisition of modern software and other information and digital technologies, which will lead to an increase in the share of intangible assets in the structure of main capital of forestry economy. It is found that in recent years certain institutional prerequisites have been formed for diversification of sources of financial and investment support for the reproduction of fixed capital of forestry economy due to an increase in the volume of bank lending and additional attraction of foreign investments. It is proved that a perspective institutional form of diversification of sources of financing for the reproduction of main capital are public-private partnership agreements, which will ensure the consolidation of resources of the public and corporate sectors to accelerate the processes of expanded reproduction and economic development of the forest resource potential of the country.
The article is devoted to the study of the administrative and legal status of local self-government bodies in the process of implementing the decentralization reform. Currently, Ukraine is undergoing a decentralization reform. Its beginning, in its current form, is considered to be the approval by the Cabinet of Ministers of Ukraine of the concept of reforming local self-government and territorial organization of power in Ukraine in 2014 and the approval of the action plan for its implementation, which launched the decentralization reform. In 2020-2021, a new stage of decentralization is taking place in Ukraine, which was characterized by a number of significant legislative changes. The article examines the administrative and legal status of local self-government bodies. It is argued that the term “local self-government body” is understood as an autonomous, non-sovereign legal entity of public law, which was created and received its power from a law adopted by Parliament. The degree of independence of local self-government in decision-making is determined by the nature and structure of administrative relations with state authorities. It is concluded that during the implementation of the reform, the legislation on local self-government and related legislation should be revised and improved in such a way as to expand the powers of local self-government bodies and contribute to the better performance of their functions, especially in the management of personnel issues, financial affairs and in determining their own priorities in the provision of public services. Despite the revision and amendment of the legislation on local self-government and other relevant legislation, the analysis of scientific sources gives grounds to assert that the exercise by local self-government bodies of their statutory powers and the performance of the functions assigned to them largely remained under the influence and control of the state authorities.
The article provides a comparative analysis of the European and domestic approach to the policy of voluntary association of territorial communities. The author conducted a study of key areas of local government reform in Ukraine and European countries. The paper describes the dynamics of the formation of territorial communities, the basic concepts, principles and conditions of voluntary association of territorial communities. The domestic normative-legal provision of the relations arising in the process of formation of capable communities is characterized. The paper analyzes the general aspects of decentralization reform on the example of European Union member states. The practical experience in the reforms of the former post-socialist countries was studied. The author notes that the use of European experience in reforming local public authorities serves as a good basis for decentralization reform in Ukraine and to achieve effective changes in the system of governance, financing, modernization of small communities in Ukraine. The paper notes that the reform of decentralization has already led to significant changes in Ukrainian society, in public administration, as well as in the system of local self-government. Since the adoption of the Concept of Local Self-Government Reform and Territorial Organization of Power in Ukraine in 2014, a legal framework for large-scale local self-government reform has been created and practical experience has been gained. The author shows that the policy of voluntary association of territorial communities should take into account the existing historical experience of such reforms. Analysis of domestic and European experience in reforming local self-government and forming capable communities shows that the policy of consolidation of territorial communities is one of the important ways to create an effective system of local self-government. Ukraine’s state policy in the field of local self-government is based on the interests of residents of territorial communities, which has led to the decentralization of power through the transfer of powers, resources and responsibilities from local self-government bodies. Based on this policy, the provisions of the European Charter of Local Self-Government and the best practices of European countries are laid down.
The article deals with economic and statistical research on the latest trends in local budget’s revenues caused by the decentralization reform, as well as the identification of its key problems, such as: significant differentiation in the regions’ fiscal capacity, arising due to a number of factors (social, geographical, resource, legislative ones); the regions’ dependence on central authorities due to the lack of effective mechanisms for devolution, hampering the efficiency and reducing the expediency of delegating certain functions; the insufficient level of the regions’ fiscal capacity; and finally, finding the ways of solving the abovementioned problems. These problems can be solved by creating conditions for increasing the local budgets’ own revenues in the face of limited budget funds. The state regional policy, having been carried out for decades, has created the regions’ deep dependence on the center and their lack of incentives to develop on their own by designing mechanisms to use the potential of Ukraine’s regions effectively. The recent decentralization policy is aimed at eliminating these negative trends. The success of this policy can only be ensured by improving and reforming the local government financing system. Local budgets are the main tool by which local authorities implement the program of social and economic development of a region. But at present, the mechanism of local budget formation is inefficient. This statement can be confirmed by the fact that the amount of financial assets in the local budget is insufficient to conduct an independent program of social and economic development. The structure and composition of local budget revenues have been studied on the basis of statistical information, their impact on the social and economic development of Ukraine’s regions has been determined. The research allows to conclude that successful implementation of the decentralization policy requires an individual approach to the formation of each administrative and territorial unit, a thorough study of economic sufficiency and independence of this unit, as well as research on social and economic development of this unit, as a whole.
Rural areas occupy the major part of the territory of Ukraine, but they are characterized by low levels of socio-economic development, limitations in the amount and quality of public services, negative demographic trends. The purpose of the article is to systematize modern means of financing rural development in Ukraine and to identify problems of their application by local governments. The authors proposed to improve the mechanism for financing rural development by active use its budgetary, credit and investment instruments. The prevalence of budgetary funding, whose limitation constrained rural development, was proven. Modern approaches to financing rural development were stated based on broadening community involvement in local budgeting, as well as in attracting investment resources.
It has been found out that government subventions are the most powerful support instrument for rural development in the spheres of infrastructure, education, health care, etc. The possibilities of financing rural development through the development budgets under financial decentralization have been investigated. It was noted that the use of participatory budgeting and other forms of project finance most clearly demonstrated real democratic transformations in local finance in Ukraine. The proposals for the use of PPP agreements, crowdfunding, and international funds’ grant programs for financing rural development were provided.
Iryna Tsymbalіuk, Mohammed Younus Hasan Alghadhywi
The main ideas and principles of inclusive development are revealed in this paper It is proved that the main condition for the transition of the Ukrainian regions to the principles of inclusive growth is the provision of developed inclusive infrastructure. The purpose of the paper is to substantiate the system of quantitative indicators that reflect the prospects for achieving the goals and objectives of infrastructure development in the region as an important component and prerequisite for inclusive growth. Based on the methodology proposed in the paper, the analysis of infrastructural development of the Ukrainian regions as a basis for inclusive growth is carried out. It is proved that in order to involve the maximum number of the population in the development processes, it is necessary to create appropriate conditions, which are provided by the developed infrastructure. Due to indicators of construction development, transport infrastructure, passenger and cargo turnover, the level of the population coverage with Internet services, preschool educational institutions for children; development of higher education, accessibility of medical services and health care, an index of infrastructural development of the region has been formed, which reflects the possibility of including all segments of the population in productive activities and creating conditions for growth. Significant asymmetry of infrastructural development between the regions of Ukraine has been revealed, which puts them in unequal conditions for achieving inclusive growth. It is stated that the solution of this problem is possible only with the active state support and improvement of mechanisms for financing regional development projects from the State budget. The main results presented in the paper are obtained during the research «Fiscal space of inclusive development of the region» and «Security of sustainable development of regions and territorial communities of Ukraine in the context of decentralization on the basis of inclusive growth», within which the author systematizes goals, objectives and indicators of quantitative assessment of the achievement of prospects for regions inclusive development.
Mykhailo Khvesyk, Oleksandr Shubalyi, Julia M. Khvesyk, Natalia M. Vasilik
Abstract The article defines the priorities, principles and main provisions of national forest policy of Ukraine towards European integration. The main objectives and structure of the mechanism of transformation of ecological and economic relations in the forest sector of Ukraine is grounded. The main tasks of transformation of ecological and economic relations in the forest sector should be decentralization of the management system, budget savings and sustainability, sustainable development and ecological security, development of public and private partnership, and welfare of local communities. It justifies priority directions of transformation, which include the system of distribution of powers between central, regional and local levels, the financing system and fiscal regulation in the forest sector, powers and subordination of the organs of ecological control, the organizational forms of companies and associations, the institutionalization of communal and private ownership of forests. Necessary organizational and economic framework for their implementation should ensure the economic mechanisms of transformation of the system of state management of economic processes, financial-credit and fiscal regulation, economic incentives of the deep environmentally friendly forest products, integration of businesses and innovative and investment development of the forest sector, the Institute of ownership of forest land, the property rights of forest users and local communities. The structure of transformation mechanism of ecological and economic relations in the forest sector is developed. It will allow the use of modern economic methods (de-monopolization and transparent competition on the timber market; economic incentives for deep wood processing; the transition to the new organizational forms of integration of economic entities; the empowerment of local communities and their executive bodies) and the instruments (preferential loans; target financing of large-scale projects at the national level; environmental insurance; transfer pricing; export and import duties; the state order; the state guarantees and subsidies), and to form an effective organizational forms of business entities in the forest sector. It is concluded that transformation processes should apply to all spheres of economic activities in the forest sector, especially in the following areas: increased powers of the management bodies of the forest sector at the regional and local levels; simplification of procedures for land allocation by local governments to provide additional reforestation; coordination between the organs of ecological control and forest management to strengthen the relationship between the real state of forestry and the system of rational use of forest resources; the introduction of modern forms of enterprise and associations of enterprises at different stages of the reproductive process.
The article defines the initial conceptual provisions of budget federalism in interaction with budgetary centralism in the order of the problem statement. The main ideas and plans of pilot project «State regulation of regional human development in the administrative region» (on the example of Khmelnitsky region) are revealed. The rights and responsibilities (main powers) of the regional state administrations and the regional councils in regulating the volume and structure of local budgets for financing the components of the Regional Human Development Index are considered. The financial self-sufficiency of regional and local authorities, local governments and united territorial communities is regulated by expenditure powers within the limits of fiscal revenues to local budgets. The ratios of budget funds of local and state levels in the Consolidated Budget of Ukraine, which are built on the basis of harmonious proportions of the «Golden Intersection», are considered. It is proposed that direct budget transfers should be carried out in accordance with the norms of financial provision of social standards for human development. Budgetary federalism in a unitary state is to regulate such scales of the financial self-sufficiency of regional authorities and local governments to assess and forecast the sources and volumes of local finances on the basis of budget and fiscal decentralization of revenues, which are determined based on expenditure powers in socio-economic development.
Demianyshyna, О. A., Nedbalyuk, O. P., Stanislavchuk, N. O.
The systemic crisis in the sphere of socio-economic development of territories is a consequence of the lack of a modern management mechanism for the development of territorial communities, which is based on the corresponding development programs.Despite the depth of studying of these scientific studies, the financial aspects of developing programs for the innovative development of territories in the conditions of financial independence of local government bodies require detailed consideration.Focused attention of researchers on the problems of management of territorial development. Attracted attention to the necessity of creating a mechanism for funding work on the development of relevant programs. It is determined that without such mechanism it is impossible to create and effectively implement territorial development programs at all levels of the administrative-territorial system of the country. All elements of the process of territorial development programming that are in need of financing are considered and which should be considered such a separate cost items of the corresponding estimate. On the basis of foreign experience (first of all the USA), it is proposed to create a nation-wide network of state information and consulting (advisory) services that would be the implementers and coordinators of work on the development of territorial development programs. It is determined that the financing of the development of territorial development programs should be carried out precisely through such services, which will ensure the efficiency and transparency of this process in conditions of financial decentralization and creation of united territorial communities in Ukraine. The proposed basic model of the process of programming the innovative development of joint territorial communities will ensure the effectiveness and transparency of this process in the context of financial decentralization.