№ 5/2018

Fìnansi Ukr. 2018 (5): 56–68

LOCAL FINANCE

BURIACHENKO Andrii ¹, FILIMOSHKINA Inna ²

¹Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0002-7354-7491
²SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-1254-3147

Fiscal decentralization and financial capacity of the local government in Ukraine

The goal of the fiscal decentralization in Ukraine is to provide the local authorities with sufficient financial resources for their competences. The authors evaluate the consequences of the fiscal decentralization in the context of the goal. In fact, the Ukrainian Government has achieved some positive results of the decentralization. But the influence of the fiscal decentralization on the financial ability of the amalgamated hromadas and the local government should be researched more deeply. Based on the statistical data, the authors prove that despite the nominal growth of the local budget resources, their value is not changed much, taking into consideration the inflation rate; while transfers but not own resources prevail in their structure. The educational and medical care subventions do not cover the territorial communities’ needs. Moreover, to receive more resources and provide the social and economic development of the amalgamated hromadas are different things. For example, the Government uses subsidies for financial equalization, but the local governments, receiving them, do not ensure the economic growth and social development of their territories. The authors consider that the indicators of the development should be identified and the inhabitants of the territorial communities should estimate the results of the local authorities’ activities by the indicators. Researching the amalgamated hromadas’ financial ability evaluation methods, the authors criticize the financial ability performances used in practice and argue that, according to this methodic, all amalgamated hromadas will be able to fund their expenditures. They suggest evaluating the amalgamated hromadas’ financial ability by the coefficient of the own local authorities resources in their expenditures for the own competences. It makes possible to determine the financial independence of the amalgamated hromadas and local governments.

Keywords:decentralization, fiscal decentralization, local government, financial capacity, local budget revenues and expenditures, amalgamated hromadas, intergovernmental transfers

JEL: Н70, Н71, Н77, Н72

BURIACHENKO A. . Fiscal decentralization and financial capacity of the local government in Ukraine / A. . BURIACHENKO, I. Filimoshkina // Фінанси України. - 2018. - № 5. - C. 56-68.

Article original in Ukrainian (pp. 56 - 68)

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