Development of local budgets in the context of local government reform

Анотація

The article examines the development of local budgets in Ukraine in the context of local government reform and the implementation of budget decentralization. Theoretical approaches to determining the essence and role of local budgets in the public finance system, as key instruments for financing the socio-economic development of territorial communities, are substantiated. The regulatory and legal principles governing the formation and implementation of local budgets are analyzed, their transformation under the influence of decentralization processes is determined, and the main legislative gaps hindering the increase in the financial autonomy of local government bodies are identified. The impact of local government reform on the financial capacity of territorial communities is assessed by examining changes in the revenue and expenditure structure of local budgets, the ratio of own revenues to inter-budgetary transfers, and the expansion of budgetary powers at the local level. It is established that budget decentralization has generally expanded the role of local budgets in financing public services, but its effects are uneven and largely depend on the economic potential of the territories. Key problems and systemic imbalances in the development of local budgets in modern socio-economic conditions have been identified, including structural inequality in the income base of communities, an imbalance between delegated powers and financial resources, persistent transfer dependence, and managerial and demographic constraints. The need to transition from the formal expansion of budget powers to the qualitative strengthening of the financial capacity of territorial communities by improving inter-budgetary equalization mechanisms, stimulating own revenues, and increasing the effectiveness of budgetary resource use has been substantiated. Keywords: local budgets, budget decentralization, local self-government, financial capacity, territorial communities, public finances.

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