Conditions Of Financial Decentralization Research Articles

ДЕЦЕНТРАЛІЗАЦІЯ ДЕРЖАВНОГО УПРАВЛІННЯ ТА ІНСТИТУЦІЙНІ ТРАНСФОРМАЦІЇ СИСТЕМИ МІСЦЕВИХ ФІНАНСІВ УКРАЇНИ

B a c k g r o u n d . Strengthening the financial basis of local self-government takes on archival importance, considering the economic circumstances of the wartime and post-war reconstruction of the territories of Ukraine. In this regard there is a need to improve the local finance management system and develop its institutional support in conditions of financial decentralization. Theoretical and practical aspects of management in the field of local finances, inter-budgetary relations, financial relations of local self-government bodies in the context of decentralization are considered in the works of domestic scientists: V. Bodrov, V. Vakulenko, I. Volokhova, N. Honcharuk, V. Gornyk, A. Degtyar. The strengthening of the financial basis of local selfgovernment in the process of the post-war recovery of the economy of Ukraine is studied in the works of Z. Varnalij, I. Vertsiuk, Ya. Zhalilo, M. Kosheliuk, I. Ozymok, O. Sokolova, U. Thomann and others. Implementation of financial decentralization, management of local finances is considered by such foreign scientists as: J. Buchanan, A. Wagner, R. Musgrave, W. Oates, P. Samuelson, J. Stiglitz, H. Zimmerman, F. Fukuyama, J. Schumpeter and others. It remains expedient to search for institutional mechanisms for further reforming the financial relations of local self-government bodies, models for managing inter-budgetary relations, sources of financing local budget expenditures, and expanding public control mechanisms in the process of managing local finances under conditions of decentralization. The purpose of the article is the scientific and theoretical justification of the institutional transformations of the local finance system of Ukraine and the development of practical recommendations regarding the mechanisms of its development in the context of the decentralization of state administration. The tasks of the article are to consider the existing problems and outline the prospects for ensuring the processes of financial decentralization, to propose mechanisms for the necessary institutional transformations in the system of local finance of Ukraine and tools for their implementation. M e t h o d s . The article was carried out with the help of modern theoretical and cognitive methods, the dialectics of the processes of public administration and local self-government in the conditions of financial decentralization and reforming of local finances. Methods of system analysis, synthesis and comparisons, historical, logical, deductive methods and modeling were also used. The research used the theory of public choice, public goods and the structural-functional approach to improve the management of budget funds in conditions of decentralization. R e s u l t s . It is claimed that the pre-war experience of active implementation of the decentralization reform in Ukraine gave positive results, from which it is necessary to move on, and further develop and improve this vector. It was determined that institutional transformations should take place within the framework of financial support system structural elements of local self-government – budgets of different levels. The mechanisms of the necessary institutional transformations in the local finances system in Ukraine and the tools for their implementation are proposed. In particular, such a method of improving the local finances system as budget cooperation is proposed. The Law of Ukraine norms "On Cooperation of Territorial Communities" have been analyzed and proposals have been made to expand the regulatory influence of the specified law regarding budget cooperation procedures. Attention was focused on the importance of training modern personnel of local self-government bodies that implement policies in the sphere of budget, finance and prices. The importance of the development of the institution of civil society is also emphasized. Emphasis is placed on the expansion of models and forms of self-organization bodies cooperation of the population in the processes of control and supervision of the local self-government bodies activities in the local finances field in Ukraine. C o n c l u s i o n s . Therefore, the goal of institutional transformations of the local finance system of Ukraine in the context of decentralization is to significantly expand the capabilities of local self-government bodies to independently manage all socio-economic processes at the level of territorial communities and to establish connections between regions, the symbiosis of which can bring the desired effect for the economy of the entire country. Such changes should be synchronized with the changes envisaged by the plan for Ukraine to acquire the status of an EU member state. Our proposals are designed to improve the quality of local self-government and encourage further scientific research in the field of local finance management in Ukraine.

Державна підтримка розвитку громад в умовах фінансової децентралізації

Узагальнено повноваження органів місцевого самоврядування та ресурсне забезпечення їх реалізації. Розглянуто напрями державної фінансової підтримки розвитку громад в умовах децентралізації влади. Визначено можливості економічного розвитку громад за рахунок державної підтримки. Обґрунтовано необхідність стимулювання створення та розвитку економічно спроможних громад.

MODERN TOOLS FOR FORMING THE OPTIMAL STRUCTURE OF REVENUES OF TERRITORIAL COMMUNITIES' BUDGETS

The influence of budgetary risks on the formation of revenues of budgets of territorial communities is investigated and a methodical approach to estimating the structure of revenues of budgets of territorial communities in the conditions of financial decentralization is developed. It is noted that today the introduction of the latest methods for optimizing the revenues of the budgets of territorial communities with permanent control over the level of budgetary risks becomes especially important. Mathematical forecasting of the probability of budget risks and its empirical measurement requires special attention. The main approaches of domestic and foreign scientists to forecasting the probability of budget risks with the help of economic and mathematical tools are considered. Its practical use, on the one hand, will ensure their permanent control, and on the other - will allow optimization of the revenues of the budgets of territorial communities. It is established that the existing methods are difficult to implement in domestic practice due to their significant mathematical calculation. Calculations were made using the postulates of portfolio theory, in particular the portfolio approach of J. Hicks, which allowed to form a rational structure of revenues of budgets of territorial communities in terms of general and special funds, as well as to identify ways to minimize budgetary risks to ensure optimal revenue structure without interbudgetary transfers in conditions of permanent crisis phenomena. This will allow local governments of territorial communities to increase the performance of their budgets. The latest tools of financial decision-making using J. Hicks' portfolio approach to the formation of the optimal structure of budget revenues of territorial communities without intergovernmental transfers, taking into account the level of budgetary risk, were obtained by applying the tools of economic and mathematical modeling. It is concluded that the latest tools for the formation of the optimal structure of budget revenues of territorial communities with permanent forecasting of the maximum possible level of their growth under the control of budget risks allow the development of ways to minimize, forming many scenarios for the optimal structure of future budget revenues and budget risk. It is established that the proposed toolkit allows to generate alternative financial solutions for local governments and assess the results and consequences of their possible adoption in determining strategic guidelines for the development of local community finances. It is proposed to further use the developed scientific and methodological approach to optimize the revenue structure of budgets of territorial communities in the context of various budgetary risks, which, of course, will allow local governments to make effective financial decisions in developing programs of socio-economic development of territorial communities.

FINANCIAL DECENTRALIZATION OF TERRITORIAL COMMUNITIES IN THE CONTEXT OF THE IMPLEMENTATION OF INTERNATIONAL EXPERIENCE

Abstract. The experience of European countries in terms of a perfect budget process and high financial discipline is important in the presence of a set of problems in the process of decentralization, which must be taken into account and eliminated in advance. This article examines the scientific and applied aspects of decentralization, analyzing the experience of European countries and outlines methodological approaches to assessing the development of local communities in modern conditions. Important aspects are outlined and the advantages and disadvantages of the impact of financial decentralization on the processes of effective development at the local level are systematized. Emphasis is placed on the need for a comprehensive reform of local self-government, which will primarily include a reform that will relate to the administrative-territorial system and the redistribution of powers and resources between different levels of government. Guidelines for the development of local budgets in the main are as have been identified. A conceptual model of territorial community development in the conditions of financial decentralization is proposed, which provides for an effective combination of budget potential, potential of economic entities, households and financial institutions and their interaction. The structure of budget revenues in European countries is analyzed. The focus is on the level of subsidies with in-depth analysis. A method of monitoring and evaluating the effectiveness of administrative and financial decentralization in terms of determining the financial capacity of the united territorial communities has been developed. It is noted that the solution of the problems of financial decentralization should be carried out on the basis of studying, generalizing and taking into account the best international experience. The world experience in the structure of local budget revenues in European countries is studied. The scientific novelty of the obtained results is represented by a set of theoretical and practical aspects of the study, namely proposals on the current state of the main activities of local governments to enhance entrepreneurship in the community in the context of implementation of international experience. Keywords: territorial community, financial decentralization, financial resources, local budget, tax revenues, subsidies, resource potential. JEL Classification J11 Formulas: 0; fig.: 6; tabl.: 2; bibl.: 19.

Financial and legal bases for the formation of territorial communities capable budgets

The formation of UTC budgets requires not only the improvement of the structure of tax revenues, as well as the analysis of revenues, but currently the use of intergovernmental transfers as important additional revenues of UTC budgets in modern research is the subject of discussion.
 The budgetary and legal relations which are formed at the level of formation of budgets of the united territorial communities are investigated, and the financial and legal bases of formation of capable budgets are defined. Examples of scientific research on various aspects of local finance as factors influencing the formation, distribution and use of national budget funds, as a legal institution and as a basis for comparative characteristics of domestic and foreign practice of local budgeting, etc. are considered. The main problems that arise in the way of optimizing the revenue policy of local budgets of the united territorial communities in the conditions of financial decentralization are described.
 The set of tasks on which the provision of financial capacity of the territorial community depends is analyzed. The main steps that the state must take to implement the budget decentralization reform effectively are identified. It is stated that during the formation of a promising united territorial community it is important to calculate its financial capacity in advance, which will allow to assess the benefits and risks of such association, determine the need for additional funds and streamlining expenditures, and to envisage its further functioning for the purpose of its socio-economic development. The concept of "UTC budget" and the essence of the concept of "capable budget" are specified. Based on the historical experience of budget relations in Ukraine and foreign experience, the need to form viable budgets at the expense of alternative revenues , namely by providing UTC rights to establish indirect taxes, regulate benefits and tax rates, income from business activities, and the use of intergovernmental transfers in the required amounts and for specific purposes is proved.
 Philosophical, general scientific and special methods of scientific cognition are used, and also formation of the balanced and substantiated income and expense parts of budgets in the volume sufficient for performance of the set tasks is found out. The legal bases for formation of the revenue part of the budget at the expense of both tax and non-tax revenues and financing of certain types of expenditures are analyzed. Proposals for improving the financial legislation regarding the terminology and essence of budget activities are substantiated.

The place of local government bodies in the system of public governance of tourist activity in the conditions of financial decentralization

The paper states the gradual revival of tourism, both in Ukraine and in the world. That is why we believe that tourism, especially in the western and southern regions of our country can become a significant driver of economic development of local communities. For the rapid and successful development of the tourism industry in Ukraine, it is necessary to find internal reserves to increase demand for domestic tourism products, increase ways to meet consumer demands for content, diversity and quality of tourism and recreation services. It is determined that the system of management of the tourism industry in the context of decentralization in Ukraine is disorganized, built on lobbying principles, consists of different in number and quality of officials, has insufficient funding and misuse of allocated funds. The importance of creating a decentralized management mechanism in the conditions of decentralization, which will be effective even with minimal funding of the tourism industry, different number of employees in this field and will ensure a high level of their professionalism. It is proposed to create tourist departments at the regional and local levels; training and retraining of specialists-managers, who in connection with the position will perform the assigned powers in the field of tourism. A separate area is the improvement or change of the law on tourism adopted in 1995, which does not fully meet modern realities and requires comprehensive changes that would meet the interests and modern needs of society. We believe that it is very important that tourism should be planned on a comprehensive basis, taking into account all aspects of legislation relating to other sectors that have a direct or indirect impact on it.

ENSURING INDEPENDENCE OF LOCAL BUDGETS UNDER CONDITIONS OF FINANCIAL DECENTRALIZATION

The article investigates the modern conditions and problems of forming local budget revenues in Ukraine. It is determined that local budgets must function as a well-oiled machine ensuring the equivalence of financial resources and planned allocations under conditions of financial decentralization. Approaches to ensuring budgetary independence are substantiated, outlining the tools necessary for local self-government bodies to ensure their capacity to develop. It is established that increased emphasis on independence of local budgets can become one the levers used for ensuring the local finance system complies with the principles of the European Charter of Local Self-Government and Law of Ukraine «On Local Self-Government in Ukraine». For this purpose, local self-governments are recommended to establish a sufficient and stable revenue base by introducing their own taxes and fees, expanding the non-tax revenue sources, changing the distribution of the revenues from the income tax and corporate tax between government budgets of different levels, creating community funds of economic development, balancing subsidies and subventions. It is argued that budgetary independence is an economic ideal that local self-government bodies should strive for. Its antipodes are rigid financial dependence of local budgets on state budgets, lack of own revenues, and ineffective distribution of funds between budgets of different levels. Additionally, the revenue sources specified in the legislature do not allow the authorities to sustain expenditures with the levies at local level. It is substantiated that territories with independent local budgets can create the state economic environment that corresponds to the principles of financial decentralization.

THE IMPACT OF THE BUDGETARY COMPONENT OF FISCAL POLICY ON MACROECONOMIC GROWTH IN CONDITIONS OF FINANCIAL DECENTRALIZATION: CASE OF UKRAINE

The article examines the role of the budget component of Ukraine’s fiscal policy in macroeconomic growth. The directions of increase of economic growth under the influence of financial decentralization are offered. The expediency of using multifactor economic and mathematical modelling in the study of the dynamics of the national accounts of Ukraine under the influence of indicators of the budget component of fiscal policy is substantiated.
 The purpose of this study is to investigate the dynamics of national accounts under the influence of the budget component of fiscal policy in the context of financial decentralization. A number of methods have been widely used in the study, including economic and mathematical modelling, correlation-regression analysis, factor analysis, and so on. These methods will underpin the development of strategic prospects for economic growth of the Ukrainian economy under conditions of financial decentralization.
 It is substantiated that an increase in the share of local budget expenditures in consolidated budget expenditures and a decrease in the share of state budget expenditures in GDP lead to an increase in the physical volume index of GDP and an increase in GDP in actual prices. It is also proven that the share of local budget expenditures in consolidated budget expenditures has an immediate direct impact on the GDP physical volume index.
 Another significant factor of direct influence on the GDP physical volume index is identified – the share of capital expenditures (development expenditures) in local budgets, as one of the indicators of financial decentralization efficiency. It is substantiated that the share of state budget expenditures in consolidated budget expenditures is a factor of inverse effect on GDP (in actual prices), and the share of capital expenditures is a factor of direct influence.
 It is proved that financial decentralization in Ukraine is an important factor of economic growth of the Ukrainian economy, as the increase of the share of local budget expenditures in the consolidated budget expenditures and the reduction of the share of state budget expenditures in GDP lead to an increase in the GDP physical volume index and an increase in actual GDP.

Зарубіжний досвід реалізації концесійних проєктів у соціальній сфері в умовах пандемії COVID-19

The article substantiates that concession is an effective instrument for the implementation by countries of social projects aimed at solving the urgent needs of territorial communities in the context of the COVID-19 pandemic. It is emphasized that the application of concession activities allows countries to remain the owner of objects, while maintaining administrative and control functions. The peculiarities of application of public-private partnership models under the concession agreement are presented. The foreign experience of implementation of concession projects in the social sphere is generalized, in particular, successful practices of attracting investments in the conditions of financial decentralization are considered. It is determined that the most popular areas for the implementation of concession projects are transport (34%), environment (16%), education (14%), telecommunications (7%), healthcare (5%), and other sectors (24%). It is specified that concession activities abroad, as a rule, are regulated by separate legislation, the cooperation of the public and private sectors is based solely on contractual relations, according to which the private operator is guaranteed to receive remuneration for the work performed or services provided from a public organization and/or direct users. Based on the carried out research, the reasons for the widespread use of concession as a form of public-private partnership in different countries are determined, among which the main are: more effective management of projects on the part of the private sector; lack of financial resources of the State and the willingness of the concessionaire to take most of the risks from the implementation of large-scale infrastructure projects. Concessional shortcomings are also presented, which include: lack of professional management experience at the regional and local levels from private partners who implement projects for the first time; significant level of financial risk to the private sector, including the likelihood of bankruptcy; political and socioeconomic situation in the world due to the consequences of the COVID-19 pandemic. Upon the grounds of a generalization of world experience, the main directions of monitoring the impact of COVID-19 on concession projects are allocated, which can assist in determining the appropriate level of actions that can be taken by governments.

Analytical evaluation of local budget revenue structure under the conditions of financial decentralization

It is determined that local budgets are the main financial institution in the financial system of local governments, occupying the central place in the economic system of each state. The objective of the paper is to analyze the structure of local budget revenues and determine the areas for its optimization. The paper provides the analytical evaluation of the local budget revenues structure. The results of the analysis of the local budget revenues structure showed the strengthening of the tax revenues role in the consolidated budget revenues of Ukraine. The role of inter-budget transfers in the formation of local budget revenues is determined. Indicators of the volume and dynamics of tax revenues in the structure of the revenue side of local budgets are considered. The general structure of tax revenues is analyzed. The share of basic taxes in the total amount of local budget revenues is determined. The general structure of tax revenues is analyzed. The share of basic taxes in the total amount of local budget revenues is determined. Special attention is paid to the system of local taxes and fees and its transformation in the context of financial decentralization reform. Disclosure of the of local budget revenues structure and the role of taxes in their formational make it possible to establish that budget revenues are tax, non-tax and other revenues that are carried out on the non-refundable basis and the solution provided by the legislation of Ukraine. It is established that the share of own revenues of local budgets is gradually increasing, at the same time, there is a significant dependence of local budgets on inter-budget transfers, which contradicts the principles of financial decentralization and does not ensure the effective development of the regions. Analysis of the local budget revenues structure shows the strengthening of the tax revenues role, which is the consequence of the decentralization reform. It is defined that the significant changes took place in 2015, and as a result the share of local taxes and fees in local budget revenues reached 22.4%. The largest specific share in the structure of local taxes and fees are the revenues from land fees and the single tax. At the same time, the largest source of pumping up the budgets is personal income tax (PIT). On the basis of the above mentioned it is proved the reform of the system of taxation by local taxes and fees should be aimed at strengthening the revenue share of local budgets and increase their financial independence.

Features of local budgets in the conditions of decentralization of the budget system of Ukraine

The paper identifies the features of local budgets in terms of decentralization of the budget system of Ukraine. Theoretical bases of functioning of local budgets are opened. The economic essence of the definition of «local budget» is given according to the Budget Code of Ukraine. Based on the economic essence of local budgets, a number of functions they perform are identified. Different approaches to the interpretation of the essence of the concept of “decentralization” are studied. The role of local budgets in ensuring their financial capacity in terms of financial decentralization is highlighted. The stages of decentralization in Ukraine since 2014 are demonstrated and their results are shown. The main aspects of financial decentralization to the processes of socio-economic development at the local level are outlined. The directions of development of local budgets in the conditions of financial decentralization are substantiated. It is proved that the quality of life of the population and socio-economic stability in the country largely depend on the effective operation of local governments. The normative-legal base which regulates functioning of local budgets in the conditions of decentralization is considered. An assessment of the formation and implementation of local budgets in terms of local government reform. A comprehensive analysis of revenues and expenditures of local budgets of Ukraine. The dynamics of the volume and structure of revenues and expenditures of local budgets of Ukraine for 2017–2019 is analyzed. It is proved that the main source of filling local budgets is tax revenues. It is substantiated that despite the decrease in some types of revenues, local budget revenues tend to increase. Emphasis is placed on the fact that local budget expenditures reflect the consequences of socio-economic processes in the country and directly affect the level of welfare of the population. The main changes in the development of local budgets in the period before and after the beginning of decentralization in Ukraine are identified. Typical problems of the state of local budgets in Ukraine are given. Guidelines for the development of local budgets are identified and measures are proposed that should be implemented to address this situation.

TAX STIMULATION AS A FINANCIAL INSTRUMENT FOR SUSTAINABLE SOCIAL AND ECONOMIC DEVELOPMENT OF HROMADAS AND REGIONS

The article examines the tendencies of structural changes in the formation of budget revenues of different levels related to the processes of financial decentralization and identifies important areas of tax stimulation of social and economic development of hromadas (local communities) and regions in Ukraine.Taxes are the major financial instruments for ensuring the sustainable social and economic development of hromadas and regions. Budget and tax policies are tools for developing the regional economic system. Stable local economic development can be ensured if the tax system is improved. Local budget revenues are the major and stable source of local economic development, and their growth is an important issue, as these funds can serve as an incentive to stimulate investment in the regions. Goal. The purpose of the article is to investigate the trends of tax system development in the conditions of financial decentralization and to identify financial mechanisms and means of stimulating sustainable social and economic development of communities and regions of Ukraine. Method. The study uses an empirically theoretical method based on the analysis of statistical data, synthesis of social and economic status of territorial development and community development. Results. To achieve a high level of sustainable development of the regions of Ukraine, a set of tools for stimulating the development of local self-government is proposed.

НАПРЯМИ ПІДВИЩЕННЯ ЕФЕКТИВНОСТІ ФОРМУВАННЯ МІСЦЕВИХ БЮДЖЕТІВ УКРАЇНИ ЗА УМОВ ФІНАНСОВОЇ ДЕЦЕНТРАЛІЗАЦІЇ

Pre-condition of increase of efficiency of budgetary process at local level is decentralization of power, optimum distributing of plenary powers and legislative settlement of questions, in the field of forming of the self-sufficient proper capital base. Sharing the looks of leading research workers of economists and practical workers, we will mark that one of important pre-conditions of increase of efficiency of budgetary process at local level in the conditions of financial decentralization is creation of effective capital base, capable enough to provide implementation of both own and delegated, plenary powers.For effective control of such it is necessary to use a wide range of tools that involve the use of variousmarketing tools, primarily to enhance the image of appropriate administrative units which lead to a gradual influx of investment that will ensure the economic well-being of the respective territories. This, in turn, will determine a sufficient capital base to increase the efficiency of the budget process at the local level in the transformation of inter-budgetary relations.In the process of developing the areas of financial support of local budgets, it is necessary to take a set of measures to inform about the prospects of doing business, the corresponding development of business zones, the establishment of cooperation, et al. As positive experience shows, more attractive for investment are territories where efforts of the proper organs of local self-government are oriented on solution of the complex decision of problems of local value, in particular such as complex development of infrastructure, improvement of terms of dwelling, assistance realization of economic activity; a significant increase in the level of competitiveness of economic entities, etc.The pre-condition for the increase of efficiency of budgetary process at local level in the conditions of financial decentralization is determination of level of attractiveness of territorial formations witha purpose of bringing in investment resources, which will contribute to expansion of different types of activity, placing new enterprises on different territories, providing of increase of level of employment of local population, rational and effective use of factors of production, which will provide growth of gross regional product, growth of welfare, and bring investments in a social sphere

Concept and components of the financial-investment maintenance of local governance

The issues related to the management of financial resources of territorial communities, financial independence of local governments and forming of efficient financial-investment policy to secure the balanced development of local communities and territories become of utmost importance in conditions of financial decentralization and administrative-territorial reform in Ukraine. The problem issues concerning the forming of financial-investment maintenance of local governance directly impact the capacity of a territorial community that should have financial, material, and other resources in the volumes sufficient to completely accomplish the tasks and function of local governments and provide social services to the population at the level stipulated by national standards. The forming of financial-investment maintenance of local governance is revealed to be directly influencing the capacity of a territorial community that should have financial, material, and other resources in the volumes sufficient to completely accomplish the tasks and function of local governments and provide social services to the population. The expansion of local governments’ competences and granting them greater independence are substantiated to be requiring more responsibility in the financial-investment policy implementation on the local level, forming of conditions to perform the economic activity, and develop businesses by all economic entities, and promoting favorable investment climate in the region. Based on the analysis of approaches to the definition of the nature of “financial maintenance” and “investment maintenance” in the context of the peculiarities of local governments’ activity, the paper suggests understanding the “financial-investment maintenance of local governance” as a set of opportunities and activities on distribution and use of financial resources and territories’ resources for the creation of conditions necessary for the efficient functioning of local governments and realization of their competences.

Principles of inclusive regional development in the conditions of financial decentralization

Purpose. The aim of the article is the development of the inclusive regional development concept, which is seen as the response to the opportunities and threats that the decentralization of power and the financial decentralization of formed territorial communities. Methodology of research. Conventional economic methods are used in the study, in particular: monographic and system-structural, which are used in the development of the inclusive regional development concept in the conditions of decentralization. Findings. It is determined that global trends are oriented towards achieving the prospects of sustainable and inclusive development. The suggested concept of inclusive regional development is adapted to the new conditions taking this into consideration, and taking into account the current processes of financial decentralization taking place in Ukraine. The suggested definition of inclusive development reveals its content and ways of achieving social and economic growth, improving the quality of life of the population. The basic conceptual idea of inclusive regional development is formed and to define the goals, objectives and ways of its implementation. The essence and the author`s vision of financial decentralization as a process of transfer from the central to the local self-government bodies of financial resources, powers, making decision rights in order to better meet the needs of the population in obtaining public goods, intensify the economic growth of the respective territories are disclosed. The main components of the financial decentralization mechanism (methods, tools, principles, forms and factors) are characterized. The definition of the regional self-development mechanism in the conditions of financial decentralization is given and the imperatives of regional self-development mechanism functioning in the conditions of financial decentralization are revealed. Determinants of inclusive regional development are identified, which in their interaction create a synergistic effect for the sustainable development goals achieving. The article proves the necessity of further investigation of theoretical and institutional foundations of regional development with a view to implementing the decentralization of power policy and the necessity of adequate financial support of these processes. Originality.The concept of inclusive regional development under the conditions of financial decentralization is substantiated, which provides for optimal allocation of the financial resources of local self-government bodies accumulated in the local budget due to the effective use of opportunities from financial decentralization and minimizing its potential threats, in order to achieve sustainable development of the region with maximizing the share of the community social product and ensuring a fair distribution of the benefits received on the basis of inclusive growth. Practical value. The obtained results of the study are the basis for solving practical problems of regional development in the context of decentralization in Ukraine. Key words: inclusive regional development concept; financial decentralization; financial decentralization mechanism; financial decentralization factors; inclusive development; region`s self-development mechanism.

Specificity of managing local budgets’ own revenues in the context of financial decentralization

Introduction. Decentralization reform in Ukraine has been implemented since 2014. It aims at transferring some of the powers of central government to the communities. The reform of decentralization in the financial sphere should ensure the financial autonomy of territorial-administrative units. Therefore, the analysis of the main factors influencing the management of own revenues of local budgets is especially relevant. Research purpose is to investigate the specifics and features of managing the own revenues of local budgets of Ukraine under conditions of financial decentralization. Methods. Several research methods are used in the article. These are: comparative analysis – to rank own revenues of consolidated regional budgets by volume; factor analysis – to identify and select factors of influence on the formation of own revenues of local budgets; regression analysis – to formalize the influence of certain factors on the dynamics of own revenues of consolidated regional budgets. Results. It is proved that the basis of the community’s financial autonomy in the context of financial decentralization is provided by broad powers to manage the formation of its own revenues to its budget. It was established that in 2017 compared with 2014, own revenues of local budgets of Ukraine increased by 2.3 times, including as a result of financial decentralization. It is proved that, by decentralizing the management of own revenues of local budgets, central government bodies, expanding the financial powers of administrative-territorial units, should ensure the growth of citizens’ well-being, fairness in the regional distribution of incomes, and slowdown of labor immigration. Conclusions. The obtained results make it possible to form the basis for the development of the main scenarios of forecasting the financial autonomy of the local budgets of Ukraine in their regional context. Further scientific researches of the author will be devoted to it.

THE INNOVATIVE WAY OF OVERCOMING OF FOOD INDUSTRY ENTERPRISES PROBLEMS

Ukrainian sustainable development envisages the food industry reforming and the formation of amodern structure of the national economy. Regional financial decentralization should help to solve this problem. Fiscal decentralization should optimize the economic interests of agricultural, food businesses, regionsand the state. The analysis of the formation of the modern food industry structure in the conditions of financial decentralization was presented in the works of many scientists: both national and foreign ones. However, so far there is no single correct decision. All this makes the problem of improving the structure of the foodindustry relevant. It has been substantiated that financial decentralization should optimize the economic interests of enterprises, regions and the state. It is impossible to separate the management of the food business and the region. It may be about managing the food business and the region at the same time.For the rapid development of the food industry, only lending under current conditions is not enough,and sometimes impossible. All this involves the creation of a regional food industry support fund that wouldstimulate the production and consumption of environmental products, introduce innovative technologies, helpto reconstruct, modernize and, in some cases, re-profile enterprises, providing them with benefits, subsidies,and subventions.

SOCIAL AND ECONOMIC EFFECTS OF INTER-BUDGETARY RELATIONS’ DECENTRALIZATION IN UKRAINE: ASSESSMENT AND CHALLENGES

The modern stage of Ukrainian regions’ economy development, on the one hand, shifts the accents towards administrative and financial decentralization with simultaneous transfer of resources, authorities and responsibilities to the local level, and on the other hand – stipulates efficient use of territories’ internal capacity and orientation at «smart specialization», optimization of the system of authorities and prevention of regional asymmetries. In this sense, an efficient system of inter-budgetary relations is the key to balanced sustainable development of the country and its regions, which should minimize the disproportions of regions’ development, provide efficient redistribution of budget resources inside the budget system caused by territorial asymmetries of revenue base and, therefore, serve as the key instrument to maintain sustainable territorial development. The paper aims to reflect on domestic experience of construction of the inter-budgetary relations model in conditions of financial decentralization in order to outline the perspective directions of its improvement. The paper assesses current functioning condition of the system of inter-budgetary relations in Ukraine according to the results of the first stage of financial decentralization. The risks and challenges of its aggravation for regions’ social and economic development are outlined. The following of them are defined as the most essential: unbalanced local budgets; excessive transfer dependence; imperfect mechanism of subvention allocation for forming of CTCs (consolidated territorial communities) infrastructure; legally unregulated and non-transparent mechanism of investment subventions allocation among the regions; insufficient mechanism of allocation of additional subsidy granted for oblast budgets as compensation of revenue loses by local budgets emerging from delegated liabilities regarding funding the educational and healthcare institutions; accumulation of the volumes of temporarily free local governments’ funds on deposit accounts in state banks. The range of practical recommendations is suggested in order to minimize the risks of inter-budgetary relations’ decentralization, in particular improvement of the procedure of allocating the infrastructural subvention to CTCs and subvention for social and economic development of regions; delineation local governments’ functional liabilities.

FINANCIAL DECENTRALIZATION AND ITS IMPACT ON LOCAL BUDGET INCOME FORMATION: INTERNATIONAL EXPERIENCE

The public governance decentralization requires the redistribution of financial resources for the powers imple-mentation delegated to local authorities. The purpose of the article is to determine the essence of financial decen-tralization and the peculiarities of its implementation in Ukraine and some other countries. The article reveals the essence of financial decentralization and related concepts defining the financial autonomy of local authorities. The features of the revenue part of local budgets formation in different countries of the world in the conditions of financial decentralization are revealed. A comparison of the main elements of the intergovernmental tax distribu-tion in some unitary countries of Europe has been made. The dynamics of tax revenues to budgets of different lev-els in Ukraine is determined. The distribution of tax revenues between budgets of different levels is presented in the context of financial decentralization in Ukraine. The obtained results of the analysis made it possible to deter-mine that for a successful decentralization reform, local authorities should be given sufficient financial resources to fulfill their responsibilities for solving local problems and ensuring regional development.

FINANCIAL ASPECTS OF THE PROGRAM OF INNOVATION DEVELOPMENT OF TERRITORIES IN CONDITIONS OF DECENTRALIZATION

The systemic crisis in the sphere of socio-economic development of territories is a consequence of the lack of a modern management mechanism for the development of territorial communities, which is based on the corresponding development programs.Despite the depth of studying of these scientific studies, the financial aspects of developing programs for the innovative development of territories in the conditions of financial independence of local government bodies require detailed consideration.Focused attention of researchers on the problems of management of territorial development. Attracted attention to the necessity of creating a mechanism for funding work on the development of relevant programs. It is determined that without such mechanism it is impossible to create and effectively implement territorial development programs at all levels of the administrative-territorial system of the country. All elements of the process of territorial development programming that are in need of financing are considered and which should be considered such a separate cost items of the corresponding estimate. On the basis of foreign experience (first of all the USA), it is proposed to create a nation-wide network of state information and consulting (advisory) services that would be the implementers and coordinators of work on the development of territorial development programs. It is determined that the financing of the development of territorial development programs should be carried out precisely through such services, which will ensure the efficiency and transparency of this process in conditions of financial decentralization and creation of united territorial communities in Ukraine. The proposed basic model of the process of programming the innovative development of joint territorial communities will ensure the effectiveness and transparency of this process in the context of financial decentralization.