№ 3/2017

Fìnansi Ukr. 2017 (3): 51–69

BUDGET POLICY

CHEKINA Viktoriia Denysivna¹

¹Institute of Industrial Economics of NAS of Ukraine

Fiscal instruments of Ukrainian social development in a decentralized environment: analysis and proposals for their improvement

High dependence of the national economy on external markets, its raw specialization, the degradation of the investment sector and the decline in industry determine an urgent need to modernize the entire economic system of the country, which is impossible without enhancing the development of the social sphere – the physical and intellectual potential of the society, increasing the level of workers’ qualification through education, culture, health etc. Therefore, financing this sphere is one of the priority issues. The article examines general provisions on fiscal instruments for the development of the social sphere of Ukraine in the context of decentralization. To identify trends in the development of the local system of social services (justified by the course on decentralization and the implementation of EU directives) and its shortcomings, local budget expenditure and revenues for 2007–2015 are analyzed benchmarked against the reported data on the execution of local budgets in the EU. It is established that due to low rates of economic growth and lack of budgetary funds in recent years, the volume of social spending has been reduced. And this is against the background of the increasing role and value of human capital for economic development throughout the world. It is found that a growing demand for the provision of social protection in Ukraine is offset by a decrease in expenditure on education and health, which could negatively affect the socio-economic situation in the coming years – the deterioration of the citizens’ health, the decline in the competitiveness of domestic experts in the international labor market due to reducing the quality of education, etc. It is proved that in the current macro-economic conditions, to increase the effectiveness of financing social expenditures form local budgets, it is necessary to intensify reforms in local self-government (on revenue decentralization). The author gives proposals on further improvements of fiscal instruments for the financial provision of social infrastructure at the local level.

Keywords:fiscal instruments, social services, decentralization, local budget expenditure, local budget revenues, financial provision.

JEL: H71, H72, H75, H76.

CHEKINA V. D. Fiscal instruments of Ukrainian social development in a decentralized environment: analysis and proposals for their improvement / V. D. CHEKINA // Фінанси України. - 2017. - № 3. - C. 51-69.

Article original in Ukrainian (pp. 51 - 69)

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