State and Tendencies of Intergovernmental Regulation in Ukraine in Conditions of Fiscal Decentralization

Abstract

A balanced socio-economic development of any country is closely related to the efficiency of the system of intergovernmental relations, which should be aimed at optimizing the process of fiscal decentralization and clear definition of the powers of local government. Interbudgetary regulation in Ukraine reflects processes of the national and political importance and is of great importance in the composition of intergovernmental fiscal relations, which priority is growing in terms of decentralization reforms. Purpose. The main objectives of this study are: to summarize a complex task that is resolved in the process of budgetary control; to analyze the dynamics of revenues of the consolidated budget of Ukraine in 2007-2016 and the proportion of own local revenues in GDP; to distinguish formation features of Ukrainian local budgets by region; to analyze volumes of local budgets per capita in terms of area; to highlight the leverage rate of local budgets; to analyze the share of interbudget transfers in total local budgets. Results. The study is a synthesis of the complex challenges that must be resolved in the process of budgetary control, such as: balancing the budget; foster the interest of local governments in the maximum revenue mobilization; reallocation of existing budgetary resources, taking into account local features. The dynamics of the revenues of the consolidated budget of Ukraine in 2007-2016 was analyzed and concluded that the proportion of own local revenues in GDP tended to decrease with a simultaneous increase in the share of the interbudget transfers from the state budget. Abovementioned resulted in the ensuring of a stable share of local budgets in the GDP structure (at 14-15%). As a result of the intergovernmental fiscal decentralization reform by the results of 2016 the share of own revenues of local budgets Ukraine in GDP rose to 7.2%, or 1.1% compared to 2015 with a simultaneous decrease in the interbudget transfers share from the state budget to 8.2% (0.6% compared to 2015). Analyzed the share interbudget transfers in total local budgets, which for a long period tended to increase (from 47.2% in 2007 to 53.4% in 2016), which is contrary to the basic principles of fiscal decentralization. Conclusion. Grounded features of Ukrainian local budget revenues by region and proved that the unevenness of income between regions of Ukraine are often equivalent to the level of industrial production. Analyzed volumes of local budgets per capita in terms of area. Presented the list of influence instruments on local budgets indexes of incomes, including the increase in the minimum wage, inflation, continuing reform of the budget system in the direction of fiscal decentralization and transfer volumes.

Determinantes De La Eficiencia Del Gasto De Capital: Caso Gobiernos Locales De Principales Ciudades en Perú, 2021

“…Asimismo, indica que tener un sistema educativo competitivo y una organización eficaz son algunas de las condiciones para un sistema de presupuesto sólido, que se basa en una planificación presupuestaria a largo plazo, restringiendo el aumento de gasto injustificado. En este sentido, las transferencias intergubernamentales son instrumentos de redistribución financiera (Sirenko et al, 2018) que tiene un impacto profundo económico y social, siempre que exista una adecuada gestión de la administración pública en todos los niveles de gobierno, tanto nacional como subnacional.…”

“…Por lo tanto, el gobierno debería poner más énfasis en PMI como la primera fase del ciclo de inversiones, donde es necesario contar con una priorización de necesidades y una cartera de inversiones más real y acorde a las necesidades de la población. En especial, por la naturaleza redistributiva de las transferencias intergubernamentales (Sirenko et al, 2018) y que la programación presupuestal proporciona recursos para mejorar la calidad de vida de la sociedad (Perea Guerra y Delgado Bardales, 2022). Toda vez que la óptima gestión del sector público es vital para el desarrollo económico y humano (Albassam, 2020), dentro de una sociedad que se preocupa por el bienestar social y su progreso en el tiempo dentro de una adecuada planificación estratégica nacional de todo el territorio.…”

Flypaper effects of Central Transfers on the spending behaviour of Ghana’s central region local governments: Does status matter?

“…It further argues that these officials are biased towards policies that favour revenue increase. These policies end up affecting the performance of local governments, measured in terms of efficient public service provision, which, according to the proponents of decentralisation, is achieved through the promotion of local autonomy, evidenced by active participation of the local people, downward accountability to the local people, and transparency (Tiebout 1956, Musgrave 1959, Rodden 2002, Weingast 2009, Pöschl & Weingast 2013, Rodden 2016, Sirenko et al 2018. The model postulates that, for local governments to perform (measured in efficient local service provision), fiscal design should reward increased own-source revenue collection and lessen dependence on intergovernmental fiscal transfers (Oates 2005, Pöschl & Weingast 2013.…”

“…Thus, fiscal system design shapes local governments' policy choices and their performance in local service provision. Sirenko et al (2018) attribute the breakdown of local governments' autonomy, a key component for the promotion of decentralisation and efficient service provision, to fiscal design, which encourages the domination of intergovernmental transfers and less regard for increasing own-source revenue collection. Rao and Singh (1998) explain further how intergovernmental fiscal transfers affect the performance of local governments from economic and political perspectives.…”

Flypaper Effect of Intergovernmental Transfers and Incentives to Improve Own-Source Revenue Mobilization of Local Governments in the Central Region of Ghana

“…To throw more light, Poschl & Weingast (2013) further contend that intergovernmental transfers directly affect incentives and interest of local government officials, thereby affecting their interest to increase own-source revenue mobilisation to finance local development expenditure. When this situation sets in, (Sirenko et al, 2018), it automatically erodes the local autonomy of local governments, as local governments become accountable to the central government than the local people for which they are supposed to serve. The situation results in a case where local governments expenditure does not reflect local needs and priorities as argued by Oates (2003) in his popular allocative efficiency principle.…”