BUDGET POLICY

STORONIANSKA Iryna ¹, PZVMOYQRFG naPKYMzuBtJ CNMfhvclkeFozR²

¹SI “Institute of regional research named after M. I. Dolishniy of the NAS of Ukraine
OrcID ID : https://orcid.org/0000-0002-0237-1409
²KAXGWfqlTR
OrcID ID : https://orcid.org/0000-0002-6987-5724

Financial capacity of regions in the context of fiscal-budgetary decentralization

In the article it is justified the necessity of reforming the system of public administration and finance towards the decentralization and the transference of authority and financial resources to the local level. The basic problem of low financial capacity of local budgets is considered, connected, on the one hand, with the excessive financial dependence on the center and high deficit of budgets that does not allow the regional bodies to perform their functions in full, and on the other hand, the low efficiency of management of formation and usage of financial resources of local budgets. It is proved the necessity of strengthening the financial base of the local budgets because of the increasing role of own revenues, strengthening of influence of local taxes and the capitations on the amount of budget revenues through the implementation of property tax, excise tax, etc. It is justified the necessity of reforming the system of intergovernmental transferences through the gradual fiscal decentralization by increasing financial capacity of the local budgets and the transition from straightening transferences to the stimuluant ones. A low cost efficiency of the local budgets expenditures is caused by their unsatisfactory structure, which appears in the growth of the part of social expenditures and significant reduction of expenditures of development. Local authorities are unable to stimulate development of region by budgetary instruments, because the amount of revenues to the budgets of development is extralow. In the article the need of changing approaches to the mechanisms of implementation and financing delegated by the state powers to the local level is highlighted and it is stressed on the need to increase of efficiency of budgetary resources management by removing vertical and horizontal imbalance in budgets.

Keywords: local budgets, financial capacity, revenues, expenditures, decentralization, intergovernmental transferences.

JEL: H70, H71, H72, H74.

STORONIANSKA I. . Financial capacity of regions in the context of fiscal-budgetary decentralization / I. STORONIANSKA, n. C. pZVmOYqrfG // Фінанси України. - 2015. - № 6. - C. 44-57.