Modeling and level estimation of efficiency of fiscal decentralization in Ukraine

Abstract

A priority area for the development of a democratic state is to ensure the well-being of every citizen. Given the current challenges and threats to the Ukrainian economy, achieving these priorities aims at building a domestic budgetary system with an emphasis on ensuring the organizational and financial capacity of local self-government. That is why the issues of fiscal decentralization come to the fore in the context of improving the effectiveness of the implementation of the budgetary policy of Ukraine. The paper considers the problems of implementation of the decentralization reform in Ukraine. The general principles of reform are studied and financial-economic and social results of financial decentralization are analyzed. The conceptual model of an organization of the process of fiscal decentralization is proposed. The estimation of the efficiency of fiscal decentralization in Ukraine is carried out using a set of indicators, such as: the indicator of decentralization by revenues, the indicator of decentralization by expenditures, and generalizing indicator of fiscal decentralization. The results calculated may be used in the decision-making while implementing the reform of fiscal decentralization in Ukraine.