Abstract
Nowadays in Ukrainian realities decentralization, as a process of expanding and strengthening the rights and powers of administrative-territorial units, contributes to the development of financial innovations, the accessibility of public goods, and improvements in the quality of life of the population.The aim of the article goal is developing the recommendations for improving the financial support of the regions by introducing new tools of influence of communities and local self-governments on the economic growth of territories.Using the methods of factor analysis, regression analysis, and significant components, the article determines the impact of regional economic development on the revenues of local budgets. The empirical findings show the close correlation between budgetary decentralization and industrial capabilities of the regions. A cluster analysis was carried out to identify the asymmetries of regional development in terms of financial capacity. It enabled to distinguish homogeneous groups of areas according to the indicators of their economic development. On this basis the authors substantiated the necessity of entrepreneurial activity stimulating, increasing the number of companies, and promoting a continuous flow of goods (works, services) from the producer to the consumer in different regions of Ukraine.
Highlights
The increasing differentiation in the efficiency of functioning of the economy of Ukraine’s regions and the introduction of decentralization mechanisms in the sphere of relations between central and local authorities necessitated a change in the approaches to financial support of the regions’ development
With a view to the deepening budgetary decentralization in the country and conducting the admin- We share the opinion of Oatеs (1972, 1994) that istrative-territorial reform, as well as clarifying in the process of budgetary decentralization, it is the impact of economic development indicators of necessary to create conditions for: the region on the formation of its financial capacity – the main component for improving the stand
Budget decentralization is closely correlated with economic capabilities of the regions
Summary
The increasing differentiation in the efficiency of functioning of the economy of Ukraine’s regions and the introduction of decentralization mechanisms in the sphere of relations between central and local authorities necessitated a change in the approaches to financial support of the regions’ development. Under the current conditions budgetary decentralization of power, as a component of state regional development policy, is one of the defining reforms in Ukraine. It has created the foundation for the entrenchment of institutional transformations and for improving the quality of life of residents. Under the current conditions it is important to identify reserves for the formation and growth of the financial potential of regions and to increase the efficiency of use of the available financial resources. The issues of financial support for the development of Ukraine’s regions in the context of budgetary decentralization need theoretical and practical conceptualization
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