Local Budget Asset Provision in Lviv Region Amid Financial Decentralization

Abstract

Proper asset provision within local budgets during the implementation of social and economic regulation is the basis for creating and developing an effective national and regional economy, and is a good means of counteracting the crisis caused by the COVID-19 pandemic. The article is aimed at analyzing the results of the decentralization policy in Ukraine on the example of the Lviv region and of the impact made by the COVID-19 pandemic on the Lviv region budget; determining the state, problems and development prospects of the budget. The article examines the organizational and economic aspects of local budgets; considers the nature and effectiveness of the decentralization reform; analyzes the state of local budgets in the Lviv region; identifies several problems and suggests some ways to overcome them; and provides recommendations to improve local budgets and local communities. The budget asset provision in the Lviv region amid financial decentralization is characterized by decrease in both revenues and expenditures of the regional consolidated budget in 2020 by 25% and 45.3% respectively; reduction of new businesses growth by 2.4%; increase in unemployment by 1.1% due to some problems of Lviv enterprises and the subsequent dismissal of their employees; Ukrainians’ outflow abroad in search of jobs. The study has identified such problems as: the COVID-19 pandemic, which was the main reason for the deterioration of the economic condition of the Lviv region budget and other local budgets in Ukraine, as well as for the reduction of revenues and expenditures within the consolidated budget of the Lviv region; deterioration of the population’s living standard; reduction of the new businesses growth rate; increase in unemployment due to the problems of Lviv enterprises and dismissal of their employees; Ukrainians’ outflow abroad in search of jobs; conflicts caused by community consolidations; inexpedient changes of statutory and regulatory character; low initiative of local self-government bodies in some communities; and others. The solution will be: cooperation of all the authorities and business to improve employment; introduction of new business assistance programs to improve the companies’ financial condition; development of programs to attract foreign investment to communities; legislation improvement; introduction of innovative activities in solving problems, etc.

Keywords

• decentralization
• lviv region
• covid-19 pandemic
• local communities
• lviv region budget
• budget deficit.