BUDGET POLICY

BURIACHENKO Andrii ¹

¹Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0002-7354-7491

Functional decentralization and improvement of budgetary relations

Current world and Ukrainian science tries to investigate economic background of budget system model and to define its advantages and disadvantages already during long period of time. The result was the budget unitarism and budget federalism models’ development. Then they were modifies and covered the features of both of them, and as result were renamed into devolution and functional decentralization models. The article defines that there is no one and clear definition of budget unitarism and federalism in the economic science, as well as the only budget classification built considering all the issues of budget relations. This situation stems from the fact that every country forms its own relevant or even unique budget system on one hand, as well all the countries, which have similar budget establishment to some extent and implement similar budget policy could be splitted into some groups, on the other hand. On the base of similarity in the approaches to budget relationship regulation, powerful splitting structure between central and local authorities the author proposes the division of the countries into groups each of which has the relevant form of budget system establishment. The author highlights that since the budget federalism theory had been developed (mid of ХХ cent.), the structure of the world economy and the methods of countries’ interrelations have been changed dramatically. So the given theory has to be revised and modified considering new factors: globalization, urbanization, informational revolution, etc. The article proves the necessity to investigate the new character of financial relationships between population of a particular region, local and central authorities. The list of recommendations concerning improvement of budget relationship system has been suggested.

Keywords:budget system, budget federalism, budget unitarism, devolution, functional decen tralization, subsidiarity, macrofederalism.

JEL: H61, H76, H77

BURIACHENKO A. . Functional decentralization and improvement of budgetary relations / A. . BURIACHENKO // Фінанси України. - 2014. - № 2. - C. 19-29.