Decentralization of Inter-Budget Relations: Theory, Practice, and International Experience

Abstract

The purpose of the article is to justify the methods of budget policy for the redistribution of cash flows in terms of differentiating powers at different levels of government and to analyse intergovernmental regulation improvement. The subject of the study is the methods of budget policy and intergovernmental regulation improvement. Research methodology. The research is based on analysis, comparison, and generalization of statistical data concerning territorial development, distribution of production capacities, migration of population and its determinants, statistical data on the state of macro-financial turbulence. The hypothesis is based on the above data. Practical implication. The budget policy is directed to reaching a certain socio-economic effect at a certain stage of social development, is implemented by the authorities with appropriate powers in a certain territory. In the administrative and budgetary reform, intergovernmental relations are multidimensional and their research needs to be conducted from the point of their categorization in terms of scale and long-term achievement of the set goals and objectives, as well as depending on priorities in the budget process management. Achievement of the effective system of intergovernmental relations is possible only if there is the unity of all subjects of the budget system. In this context, the most pressing issues of intergovernmental interactions and regulation of cash flows are highlighted. Value/originality. The proposed model of principles, tools, and mechanism of distribution and regulation of intergovernmental fiscal flows will provide an opportunity to ensure the unity of all levels of the budget system and their interaction, which, in turn, will ensure macro-financial stability of the state, efficient allocation of budget expenditure, development of society’s democratization and uniform socio-economic development of some regions.