Economic mechanisms for implementing state policy to ensuring sustainable regional development in the conditions of decentralization

Анотація

The article aims to develop theoretical and methodological basis of economic mechanisms for implementing the state policy of sustainable regional development in Ukraine under the policy of decentralization. Particular attention is paid to strengthening the financial and institutional capacity of regions in the context of structural economic transformations, modern challenges and post-war recovery. The study seeks to substantiate a differentiated approach to selection and application of policy tools depending on the type of a region, its level of economic development, revenue capacity and degree of transfer dependency. The research is based on a systemic approach to analyzing decentralization as a multi-level public governance framework integrating fiscal, institutional and investment components. Methods of scientific abstraction were used to clarify the essence of economic mechanisms and institutional capacity. Statistical and comparative analyses were applied to assess trends in local budget revenues, the structure of tax sources, intergovernmental transfers and indicators of regional financial sustainability. The key quantitative criteria mentioned include per capita local revenues, gross regional product, share of own-source revenues in total budget structure, transfer dependency ratio and capital expenditure levels. A typological classification of regions was used to ensure analytical consistency and policy relevance. The research confirms that fiscal decentralization significantly expanded the revenue base of local budgets, primarily through the assignment of personal income tax, single tax revenues, land payments and other local sources. The article substantiates that the reform enhances financial autonomy and creates incentives for local economic development. However, disparities in economic structure, demographic shifts and business relocation have intensified interregional inequalities. While intergovernmental transfers remain an important instrument of equalization, excessive reliance on them may reduce development capacities and strategic initiative at the local level. The study substantiates the necessity of combining fiscal (budget autonomy, equalization mechanisms), investment (public-private partnerships, development funds) and digital financial tools (open budgets, e-governance systems) and organizational-economic measures that include strategic planning and performance-based budgeting. Their coordinated application within a differentiated model ensures stronger resilience, improved competitiveness and balanced socio-economic development. The scientific contribution lies in the development of approaches that justify used mechanism depending on the type of region and the expected effect, which is also supported by different financial and institutional capacity. This approach enables a more targeted, evidence-based and adaptive implementation of sustainable regional development policy, particularly under conditions of economic instability and reconstruction.

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