Economic and Statistical Assessment of the Financial Stability of Local Budgets in Ukraine
The need for setting financial and economic stability of local budgets and an adequate degree of financial decentralization determines new requirements to the local budget administration. The article’s objective is to deepen the theoretical and methodological framework for assessment of the financial stability of local budgets.
The existing theoretical and methodological framework for the analysis of processes involved in mobilization of financial resources to local budgets is shown, and the econometric assessment of the current financial stability of local budgets in Ukraine is given. A comprehensive analysis of the financial stability of
local budgets in Ukraine is made, with demonstrating that the efficiency of the financial system in Ukraine is conditional on the financial capacities and financial stabilities of its territories.
It is shown that the share of local budget revenues in the consolidated budget of Ukraine is too low. It is evidence of high centralization of financial resources in the state budget, making local self-governance bodies far less autonomous and independent. A comprehensive analysis of the financial stability of local budgets made by computing an integral index measuring the cumulative impact of integral estimates taken for the analysis: balance, financial autonomy, budget efficiency. The assessment of the financial stability of local budgets shows that the integral index of financial stability was growing in 2012-2016 due to the increasing local revenues of local budgets, although the reliance on financial transfers from the state budget was still very strong. A positive factor is emphasized, which is the legal acts on budget autonomy and financial independence of local budgets, issued during 2016.
Further studies of issues related with strengthening the financial stability of local budgets will be focused on developing instruments for effective management of processes involved in mobilization and use of financial resources of local self-governance bodies.
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