№ 6/2018

Fìnansi Ukr. 2018 (6): 58–74

LOCAL FINANCE

STORONIANSKA Iryna ¹, BENOVSKA Liliya ²

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

The peculiarities of financial equalization of the development of territories in the conditions of budgetary decentralization

In the article, there is analyzed the essence of financial equalization and its role in eliminating the disproportions of development of territories. It is found out the necessity of realization of financial equalization with the observance of the principle of territorial justice, when the distribution of income of the society, on the one hand, should be directed at ensuring the minimal needs of all members of the society, and on the other hand, in compliance with the principle of “whoever earns more – he gets more”. There are analyzed the changes of the system of financial equalization in Ukraine in the conditions of modern reforms. It is proved that the modern system of equalization in Ukraine is of a mixed type – that is, it simultaneously includes both equalization tools for the income of the territories and separate tools of equalization of expenditures. New instruments for equalization of income have a positive effect on the dynamics of the development of territorial communities at the present stage. At the same time, the mechanisms of their functioning are connected with a number of problems that endanger the achievement of the ultimate goals of the decentralization reform, and therefore require the speedy improvement. The problems of vertical and horizontal budget imbalances are analyzed, among them: the transference to the local budgets the additional financial burdens without the expansion of financial base, financial equalization only on the indicator of personal income tax places territorial communities in different conditions of development; instability of the state's financial policy in questions of motivation of the communities for increasing their own financial potential and others. It was clarified that redistribution of local budget revenues, after the conduction of budgetary decentralization in Ukraine, took place in favor of cities of regional importance and newly formed united territorial communities, while the regional budgets had the greatest losses. In the article, it is emphasized that the low financial capacity of most newly created territorial communities in Ukraine requires the revision of a number of decisions on the creation of territorial communities, their capacity, efficiency of work of elected local self-government authorities and the expediency of their future existence.

Keywords:financial equalization, territorial differentiation, budget decentralization, budget imbalances

JEL: H72, H77, R51

STORONIANSKA I. . The peculiarities of financial equalization of the development of territories in the conditions of budgetary decentralization / I. STORONIANSKA, L. Benovska // Фінанси України. - 2018. - № 6. - C. 58-74.

Article original in Ukrainian (pp. 58 - 74)

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