Decentralization in Ukraine: trends and factors of local budget revenues

Keywords: budget decentralization reform, regional economic growth, structure and revenue factors of local budgets

Abstract

It is believed that budget decentralization creates the conditions for ensuring the socio-economic growth of the country. At least in recent years, EU countries have on average significantly increased overall local budget revenues from taxes and social contributions. In Ukraine, a course on extending budget decentralization has also been announced. In the last five years, the first results have been obtained, which creates possibilities for their analysis and evaluation. In view of the progress of fiscal decentralization reform, the article investigates the condition, tendencies in formation of the structure of the revenue part of local budgets in Ukraine and financial possibilities of local authorities to provide budget revenues. In general we face with the relatively weak statistical base of the study. Nevertheless we found possibilities to make comparative analysis and to create dynamic series, to bypass statistically insignificant relationships and, on the basis of this, to draw qualitative conclusions on one aspect, namely - the formation of the revenue part of local budgets, keeping in mind that according to world practice it is mostly associated with economic growth. As a result of the study, the impact of decentralization on the economic growth of Ukrainian regions is still being realized mainly through the use of intergovernmental transfers. The tendencies of structural changes in local budget revenues are shaped in the direction of strengthening the role of the central government, when even during the period of reform the share of intergovernmental transfers is slowly increasing. Against this background, only a small share of revenue is attributable to own sources that can be directly influenced by local authorities. On the whole, the growth rates of local budget revenues without transfers are more dependent on changes in disposable income per capita.

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Published
2020-01-13
How to Cite
Verlanov, Y., & Radichenko, O. (2020). Decentralization in Ukraine: trends and factors of local budget revenues. Public Administration and Regional Development, (6), 732-752. https://doi.org/10.34132/pard2019.06.02