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The guidelines to improve the distribution of expenditure responsibilities in the system of local government

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  • D. Serebrianska

Abstract

The first step towards effective fiscal decentralization, which is one of the most important tasks of local government reforms in Ukraine, should be sharing of responsibilities between the levels of government. The article analyzes the shortcomings and contradictions of legal regulation of the distribution of functional and expenditure responsibilities between local authorities in the Budget Code of Ukraine and the Law of Ukraine "On Local Self-Government in Ukraine". That leads to a lack of the government's responsibility for a specific function. It is proved that, due to the above mentioned deficiencies, almost a fifth of the expenditures of local budgets are financed contrary to the Budget Code of Ukraine. The author proposes various guidelines to improve the distribution of functions between the village, district and regional levels of local government based on the application, in addition to the principle of subsidiarity, of the principle of financial capacity of local communities and economies of scale criteria and externalities of certain types of public goods. The next step towards fiscal decentralization should be the redistribution of revenue sources between the different levels through the consistent application of the principle of equivalence.

Suggested Citation

  • D. Serebrianska, 2014. "The guidelines to improve the distribution of expenditure responsibilities in the system of local government," Economy and Forecasting, Valeriy Heyets, issue 3, pages 83-92.
  • Handle: RePEc:eip:journl:y:2014:i:3:p:83-92
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