FINANCIAL CAPACITY OF TERRITORIAL COMMUNITIES AS AN INDICATOR OF DECENTRALIZATION EFFECTIVENESS AND A COMPONENT OF THE SOCIO-ECONOMIC DEVELOPMENT OF THE REGION
DOI:
https://doi.org/10.31470/2786-6246-2025-13-6-17Keywords:
financial capacity, territorial communities, decentralization, local self-government, intergovernmental relations, socio-economic development, regional policy, budgetary autonomy, public administration, financial sustainabilityAbstract
The article provides a comprehensive theoretical understanding of the concept of financial sustainability of territorial units using the example of communities, which is becoming particularly relevant in the context of the transformation of the public finance system of Ukraine. The critical importance of budget efficiency as a system-forming factor of sustainable socio-economic development of territorial units in the context of implementing the decentralization reform and ensuring financial independence of the local level is emphasized. A theoretical and methodological analysis of the concept of «budget efficiency» is carried out, taking into account the specifics of the functioning of the modern financial system and the trends of strengthening fiscal decentralization. It is revealed that the organization of sources of local budget revenue formation, diversification of financial revenues, and increasing the efficiency of financial resource management are key challenges to achieving the appropriate level of budget efficiency. The substantive content is substantiated, and the scientific interpretation of the basic concepts related to budget efficiency and decentralization is carried out, taking into account the modern challenges of economic security and the need to balance the interests of the state and local self-government. The main parameters of the budget efficiency of territorial communities of Ukraine are characterized by modeling the specified category and determining the criteria for its assessment. Particular attention is paid to the influence of external factors, in particular, military operations, the level of occupation of territories, and general macroeconomic instability, which significantly affect the possibilities of ensuring the financial stability of communities. Based on the results of the study, conclusions are formed that reflect the trends in the development of regions as an integral state system for implementing decentralization reform in Ukraine and outline promising directions for increasing budget efficiency in the face of modern challenges.
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