Theoretical and Methodological Justification for the Formation of Local Budgets in the Context of Decentralization

Abstract

The aim of the article is to formulate a theoretical and methodological justification for the formation of local budgets, including budgets of united territorial communities (UTC). At each stage of the study, the main problems in preparing and implementing local budgets are identified, and proposals on their solution, in particular, the development of the theoretical and methodological bases for the formation of local budgets, are elaborated. A comprehensive analysis of the main trends in the development of UTCs in terms of changes in their number, their population and occupied area is carried out. Furthermore, an assessment of using budgetary resources by local authorities is fulfilled. The results of the study demonstrate that local budget revenues do not correlate with the rate of growth in the number of UTCs and the area they occupy, given that in the period under consideration the number of UTCs increased almost six times, while their revenues — only slightly more than two times, which corresponds to the growth rate of the Gross Domestic Product. In addition, the volumes of their revenues include a rather weighty inflation component. Thus, the newly created UTCs have not yet become the locomotive of social development, therefore, significant reforms are needed in the development of both local self-government and UTCs. Based on the results of the analysis of preparing and implementing local budgets, there elaborated a theoretical and methodological basis for their formation, which is aimed at improving the formation of local budgets, including those of UTCs.

Keywords

• decentralization
• local budgets
• theoretical and methodological basis