№ 9/2019

Fìnansi Ukr. 2019 (9): 27–42https://doi.org/10.33763/finukr2019.09.027

BUDGET POLICY

BURIACHENKO Andrii ¹, LEVCHENKO Kateryna 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/0000-0001-9099-2303

Behavioral economy and decentralization of the budget system

At the present stage of development of Ukrainian statehood, when the system of financial relations between society and the state is reformed in the direction of decentralization, there is a need to form a system of vital activity of society based on a balanced distribution of rights and responsibilities not only between levels of local government, but also between the state and society in as a whole. Since one of the priority tasks of local authorities is interaction with society, there is an urgent need to develop measures that would allow the latter to transform into a subject of economic relations, endowed not only with the opportunities but also with the legal rights of solving social and social problems of relevance with the economic activity of the region of his residence. However, an individual, and society, does not always demonstrate rational economic behavior, because of the actual uncertainty of needs and the inadequate assessment of the required information. The purpose of this article is to study the role of behavioral economics for local budgets. The aspects we consider to decentralize the process of decentralizing power and reforming local government in Ukraine clearly show that the role of the behavioral economy for the local budgets is very large. Behavioral economics enhances the explanatory capacity of the traditional economy by providing a more realistic psychological justification for the initial prerequisites for analyzing society’s behavior as a taxpayer in local budgets. The behavior of society as taxpayers in local budgets is influenced by the level of stability of the legal field and the quality of regulatory institutions, as well as the level of financing of public goods. In order to increase the level of voluntary payment of taxes to local budgets, it is necessary to carry out comprehensive reforms in the fiscal sphere, aimed at improving the quality of the economic environment at the level of territorial communities, improving the process of tax administration and increasing the level of spending of local authorities by mobilizing financial resources, taking into account the basics of behavior.

Keywords:decentralization, revenues, local budgets, behavioral economics, trust, taxes, society

JEL: G02, H71, Н77

BURIACHENKO A. . Behavioral economy and decentralization of the budget system / A. . BURIACHENKO, K. Levchenko // Фінанси України. - 2019. - № 9. - C. 27-42.

Article original in Ukrainian (pp. 27 - 42)

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