Financial self-sufficiency of territorial communities in decentralization conditions: analysis and new difficulties

  • Taisiiа Krushelnytska Dnipropetrovsk Regional Institute for Public Administration National Academy for Public Administration under the President of Ukraine
Keywords: public administration, local government, local budget, financial self-sufficiency, intergovernmental transfers, intergovernmental transfers institutional difficulties


This article analyzes the current state of financial self-sufficiency of the territorial communities of Ukraine, investigates the mechanisms of forming local budgets in the context of decentralization and identifies new economic and institutional difficulties for community development.The relevance of this article is condition by the need to address the problems of creating adequate material, financial and organizational conditions to ensure the exercise of local and regional authorities' own and delegated powers. It is determined that decentralization is a complex system of public management of organizational and functional influence of public authorities on the functioning and development of territories.The analysis of the state of practical implementation of financial support of territorial communities. It is revealed that against the background of increasing absolute size of local budget revenues, their share in GDP, which is redistributed through local budgets in the period 2002–2006 was 20 %, in 2007, before the global financial crisis, reached 32.71 %, and Since 2015, since the beginning of decentralization, it has fluctuated at the level of 15%. This level is slightly lower than in the developed countries of Europe, which indicates a strong growth potential for Ukraine.The level of financial dependence/independence of local budgets from intergovernmental transfers from the State Budget. It found that the share of local budgets, formed with the participation of intergovernmental transfers remains quite high, although in 2018–2019 there was a tendency to decrease and increase the financial capacity of local budgets. Thus, right after the start of decentralization in 2015, their share was 59.08 % (own 40.92 %), and in 2019 they are expected to decrease to 50.2 % (correspondingly, their own increase to 47.34 %). Although, overall, there has been a tendency to strengthen the financial capacity of territorial communities, the practice of looking toward reducing the share of taxes credited to local budgets is an example of inconsistent state budgetary policy.In order to shape the financial self-sufficiency of territorial communities in the course of decentralization, an important institutional complication has emerged and needs to be address. We mean rethinking the role of local governments in shaping the local budget, eradicating paternalism, and fostering the philosophy of ownership and responsibility of each citizen in the development of society and the territorial community.


Download data is not yet available.


Zahorskyi, V. S., & S. O. Teleshun, S. O. (Ed.). (2011). Publichne vriaduvannia [Public Governance]. Lviv: LRIDU NADU [in Ukrainian].

Derkach, M. I. (2011). Detsentralizatsiia fiskalnykh funktsii derzhavy u konteksti zabezpechennia staloho rozvytku Ukrainy [Decentralization of fiscal functions of the state in the context of ensuring sustainable development of Ukraine]. (p. 12). Dnipropetrovsk: Styl [in Ukrainian].

Valovyi vnutrishnii produkt (VVP) v Ukraini 2019 [Gross Domestic Product (GDP) in Ukraine 2019]. Ofitsiinyi web-sait Ministerstva finansiv Ukrainy – The official website of the Ministry of Finance of Ukraine. Retrieved from [in Ukrainian].

Europe and Central Asia Economic Update, Spring 2019: Financial Inclusion. Retrieved from

Pro rezultaty analizu formuvannia i nadannia z Derzhavnoho biudzhetu Ukrainy mistsevym biudzhetam transfertiv ta stanu mizhbiudzhetnykh rozrakhunkiv u 2003-2011 rokakh [On the results of the analysis of the formation and provision of transfers from the State Budget of Ukraine to the local budgets and the state of inter-budgetary payments in 2003-2011]. Retrieved from: [in Ukrainian].

Informatsiia Ministerstva finansiv Ukrainy shchodo vykonannia Derzhavnoho biudzhetu Ukrainy za 2012 rik [Information of the Ministry of Finance of Ukraine on the implementation of the State Budget of Ukraine for 2012]. Retrieved from [in Ukrainian].

Dovidky shchodo stanu vykonannia mistsevykh biudzhetiv (za 2013 – 2017 rr) [Information on the state of implementation of local budgets (2013-2017)]. Retrieved from

Sliuz, T. Publichnyi zvit Pro pidsumky diialnosti Derzhavnoi kaznacheiskoi sluzhby Ukrainy za 2018 rik [Public Report on the Results of the State Treasury Service of Ukraine for 2018]. URL: /sites/1/%20%D0%97%D0%92%D0%86%D0%A2%20%D0%93%D0%9E%D0%9B%D0%9E%D0%92%D0%98%20%D0%94%D0%9A%D0%A1%D0%A3%202018.pdf [in Ukrainian].

Naselennia ta mihratsiia : statystychnyi zbirnyk za 2018 r. [Population and Migration: the 2018 statistical compilation]. Retrieved from [in Ukrainian].

Government revenue, expenditure and main aggregates. EUROSTAT. Retrieved from

Pro Derzhavnyi biudzhet Ukrainy na 2019 rik: Zakon Ukrainy vid 23.11.2018 r. № 2629-VIII [On the State Budget of Ukraine for 2019: Law of Ukraine of 23.11.2018 No. 2629-VIII.]. Retrieved from [in Ukrainian].

Statystychnyi zbirnyk: «Biudzhet Ukrainy 2017» ["Statistical collection: Budget of Ukraine 2017"]. Kyiv, Departament derzhavnoho biudzhetu Ministerstva finansiv Ukrainy. Retrieved from [in Ukrainian].

Biudzhetnyi kodeks Ukrainy : Zakon vid 21.06.2001 № 2542-III (vtratyv chynnist) [Budget Code of Ukraine: Law of June 21, 2001 No. 2542-III (repealed)]. Retrieved from [in Ukrainian].

Tulai, O. I. (2007). Zarubizhnyi dosvid funktsionuvannia mistsevykh biudzhetiv ta mozhlyvist yoho implementatsii u vitchyznianu praktyku [Foreign experience of functioning of local budgets and possibility of its implementation in domestic practice]. Problemy material'noj kul'tury–jekonomicheskie nauki – Problems of material culture–economic sciences, 99, 93–97.Retrieved from [in Ukrainian].

Bobrovska, O. Yu., Krushelnytska, T. A., Latynin, M. A. et al. (2017). Potentsial staloho rozvytku terytorii: metodolohichni zasady formuvannia i naroshchennia [Potential for Sustainable Development of Territories: Methodological Foundations of Formation and Extension]. O. Yu. Bobrovska (Ed.). Dnipro: DRIDU NADU [in Ukrainian].

Biudzhet Ukrainy : informatsiine elektronne vydannia [Budget of Ukraine: information electronic edition]. Retrieved from [in Ukrainian].

Pro osoblyvosti skladannia proiektu mistsevoho biudzhetu na 2020 rik ta prohnozu mistsevoho biudzhetu na 2021–2022 roky: lyst Ministerstva finansiv Ukrainy [On the specifics of drafting the local budget for 2020 and the forecast of the local budget for 2021-2022: letter from the Ministry of Finance of Ukraine]. Retrieved from [in Ukrainian].

Abstract views: 135
PDF Downloads: 159
How to Cite
Krushelnytska, T. (2020). Financial self-sufficiency of territorial communities in decentralization conditions: analysis and new difficulties. Public Administration Aspects, 8(1), 6-17.