BUDGET DECENTRALIZATION AS A FACTOR OF REGIONAL DEVELOPMENT (ON THE EXAMPLE OF THE SUMY AREA)

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BUDGET DECENTRALIZATION AS A FACTOR OF REGIONAL DEVELOPMENT (ON THE EXAMPLE OF THE SUMY AREA)

Journal Title: Проблеми системного підходу в економіці - Year 2018, Vol 5, Issue 67

Abstract

The article discusses the essence of budget decentralization as a factor of regional development. The implementation of decentralization can cause an expansion of authorities for local government and also be expected to encourage the improvement of local financial capability. Besides that, decentralization tends to allow larger authorities for local government to manage and maintain the local area, including financial management, so it finally enables local government to be easier to increase their economic potential in developing the local potential. Local authorities are closer to the people, know better their needs and thus are able to meet their needs better than the central government. This research is aimed to justification the impacts of budget decentralization on supporting economic development of the Sumy area. The article discusses the financial capability of administrative units in the Sumy area after their merger. The result of the merger is an increase in budget revenues, a decrease in budget expenditures on the needs of the local public services and the emergence of additional financial opportunities for regional development. The local governments can determine the allocation of expenditures themselves versus those the center mandates expenditures and local levels simply execute those expenditures. Improving the efficiency of budget spending can be due to competition between territories. Local authorities will try to improve the quality of various types of public goods for their people get while reduce budget costs. The effectiveness of budget revenues increases due to the fact that in a particular territory local authorities are more interested to collect their own revenues than in collecting tax and non-tax revenues exclusively in the state budget. Thus, there are incentives at the local for developing investment projects for regional development and finding investors for their implementation. Thus, work in the field of fiscal decentralization should be carried out taking into account the competitive advantages of territories in the issues of development, implementation, and evaluation of measures of their development. Self-awareness, activation, and assumption of responsibility for their lives within the territory where the community lives and cooperation are the main features of budget decentralization and factors of regional development. The decentralization reform in Ukraine is gaining momentum, which is impossible to stop. But for its success, it is necessary to expand the financial autonomy of local authorities due to fiscal decentralization, which requires further research.

Authors and Affiliations

L. O. Rybina, M. M. Heyenko

Keywords

budget decentralization region development united territorial community local budget taxes budgetary expenditures

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EP ID EP562306
DOI 10.32782/2520-2200/2018-5-26
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