№ 12/2016

Fìnansi Ukr. 2016 (12): 45–58

BUDGET POLICY

KUZKIN Yevhen ¹

¹State Agency of Motor Roads of Ukraine
OrcID ID : https://orcid.org/0000-0002-6790-8238

Theoretical foundations for using targeted intergovernmental transfers to local budgets

The implementation of a local government reform in Ukraine establishes specific requirements for the use of new forms of financial provision of delegated powers to local authorities. The article defines the specific features of using separate types of intergovernmental transfers, in particular from the perspective of conditions and criteria for granting them. The typification of intergovernmental transfers makes it possible to consider them from the standpoint of effectiveness of the state police in the relevant field and to theoretically assess the risks specific to each form of state financial support. The article reveals the impact of certain types of intergovernmental transfers at the level of financial autonomy of local budgets and organizational aspects of the delegated powers of local authorities in the relevant field. The author identifies best practices of foreign countries for the use of specified targeted intergovernmental transfers, with emphasis on methodological risks that arise in the donor and recipient budgets. Particular attention is given to the criterion of cost-sharing, the use of which, all things being equal, increases the effectiveness of the use of targeted transfers to local budgets. The article presents a number of criticisms on the introduction in Ukraine of targeted transfers to local budgets from the state budget for the implementation of delegated powers to local authorities. An incomplete reform of intergovernmental relations actualizes the problem of ineffective separation of powers and duties between levels of government. The necessity for implementing criteria to increase the total efficiency of the specified instruments of intergovernmental relations in the methodology of targeted transfers provision is economically justified in the study.

Keywords:interbudgetary regulation, intergovernmental transfers, targeted intergovernmental transfers, financial equalization.

JEL: H61, H72, H77.

Kuzkin Y. . Theoretical foundations for using targeted intergovernmental transfers to local budgets / Y. . Kuzkin // Фінанси України. - 2016. - № 12. - C. 45-58.

Article original in Ukrainian (pp. 45 - 58)

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