PHYSICAL DECENTRALIZATION AS DETERMINANTS OF REGIONAL DEVELOPMENT

Abstract

The purpose of the article is establishing the preconditions for the process of fiscal decentralization in Ukraine. To achieve this goal, the following tasks were solved: defined economic and political directions of decentralization; essential signs of fiscal decentralization and fiscal federalism are found. In the course of the research, general economic methods of scientific knowledge were used, namely: analysis, induction, deduction, synthesis, etc., and also the system approach was used. The evolutionary need for decentralization is manifested in the possibility of solving two key areas that are crucial for the further development of the state: economic – the organization of an effective redistribution of powers between the central, local and regional authorities, ensuring adequate financial support for the implementation of these authorities; the political – providing a certain level of autonomy to regional structures, sufficient for solving local problems within a single unitary state. Fiscal decentralization involves the delegation process organization of certain budget and tax functions in the state, embodied in the sources of the state financial resources formation and the target directions of their spending at lower administrative levels of government. The central direction in which decentralization is being implemented is the fiscal policy in the state, which involves a radical change in the principles of organization of the budget process and key approaches to its organization. Fiscal federalism designed to ensure the increase in the efficiency of public administration facilities at the expense of spatial preferences. As a result of this study, the main impacts of fiscal decentralization processes on the level of regions fiscal capacity were assessed. The processes of decentralization are an integral part of the progressive states economic development with a market economy, since they ensure the optimization of the budgetary resources distribution and political responsibility between the national and local governments, in accordance with the specifics of the public needs at the administrative level of government. Consequently, decentralization processes have a positive effect of the region fiscal capacity state, provided that they are integrated into their implementation.