№ 3/2020

Fìnansi Ukr. 2020 (3): 94–111https://doi.org/10.33763/finukr2020.03.094

BUDGET POLICY

MALYNIAK Bohdan ¹

¹Ternopil National Economic University
OrcID ID : https://orcid.org/0000-0001-6965-393Х

Budgeting and priorities for community development: harmonization instruments and problems of their implementation

The goal of this study is to identify the composition and the degree of development of the procedures used to subordinate the budget policy at the local level to the strategies of territorial community development, as well as to systematize and to evaluate the practice of their implementation. Proceeding from theoretical enquiry into local self-government and budget management, we found proof of the need for coherence between budget policy and local development planning, and classified all possible tools used to perform this task into two groups. The first group includes mechanisms of coordination between budgeting and development priorities set at the level of territorial communities, whereas the second group contains tools of harmonizing the respective parameters at the level of budgetary units (budget institutions). Based on the study of the problems arising in the course of applying each group of the mechanisms, we have found that the main reasons that impede effective coherence between budget parameters and development goals at the level of territorial communities are the lack of institutional regulation, in particular the indeterminacy with respect to the institutional unit that should approve local budget forecasts; flaws in the mechanism of coordinating the local budget forecast and draft budget with the strategy of community development and the program of social and economic development. The key problems deterring the coherence between the financial performance indicators for budgetary units and the development priorities set by communities were found to stem from imperfections in the coherence mechanism, which coordinates the goal and tasks of budget programs and the respective parameters of community development program documentation. Poor budget program performance indicators and their inadequacy with respect to performance efficiency indicators for local development strategies and programs give rise to disincentives for budgetary units to coordinate their financial activity with the set priorities.

Keywords:local budget, local budget forecast, development strategy, social and economic development program, budget planning

JEL: H70, R51

MALYNIAK B. . Budgeting and priorities for community development: harmonization instruments and problems of their implementation / B. . MALYNIAK // Фінанси України. - 2020. - № 3. - C. 94-111.

Article original in Ukrainian (pp. 94 - 111)

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