PRAGMATISTS IN PROCESSES OF THE FISCAL DECENTRALIZATION AND IMPROVEMENT OF APPROACHES TO THE EVALUATION OF THE EFFECTIVENESS OF FINANCIAL EQUALIZATION

Authors

  • Oleksandr Rozhko

Keywords:

fiscal space, public finance, fiscal space forming tools, fiscal vulnerability, fiscal instruments, fiscal policy

Abstract

Today, the public sector reforming in the national economy involves fundamental changes of methods of formation and use of state financial resources at all levels of the budget system. One of the main objectives of the budget system of modern Ukraine renovation is the creation of an effective mechanism of fiscal adjustment considering the characteristics and specifics of intergovernmental relations and fiscal capacity of local governments. In view of the above, the purpose of the paper is to identify the main trends of fiscal decentralization in Ukraine and to propose the author's approach to evaluating the effectiveness of financial equalization based on consideration of the Gini coefficient and the Lorenz curve constructing for the evaluation of uneven incomes of regional budgets per capita permanent population before and after the reception of intergovernmental transfers.

The analysis of budget indicators is held. On this basis, the main trends in the fiscal decentralization in Ukraine are identified. The innovations are determined in the transfer of extra-budgetary authority to the local government and securing stable sources of revenue for their implementation. It is proved that there should be decentralized model of mixed type in the basis of the budget system. The estimation of efficiency of financial equalization of the budgetary allocation used by the state to create fiscal space is held according to the author's structural and logical scheme.

The evaluation of the effectiveness of financial equalization in the budgetary allocation in Ukraine for 2013-2015 years is held according to the regional budget revenues and Kyiv city, including and not the intergovernmental transfers, as well as the annual average population of the regions. The paper improves the scientific and methodical approach to the effectiveness of financial equalization evaluating. Unlike other approaches, here we based on measuring the Gini coefficient and Lorenz curve construction to evaluate the uneven incomes of regional budgets per capita permanent population before and after the reception of intergovernmental transfers. This allows controling the dynamics of reducing of financial provision inequalities of socio-economic development of local communities.

Published

2018-02-16