The influence of financial decentralization on the restoration of the economy of Donbas

The article deals with the specifics of Donbas regional development from the point of view of the introduction of decentralization processes in a situation of armed conflict and a high degree of political and socioeconomic uncertainty. The features of the formation of local budgets of Donetsk region...

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Datum:2018
Hauptverfasser: Fomichenko, I., Barkova, S.
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spelling nasplib_isofts_kiev_ua-123456789-1501442025-02-10T00:27:16Z The influence of financial decentralization on the restoration of the economy of Donbas Влияние финансовой децентрализации на восстановление экономики Донбасса Вплив фінансової децентралізації на відновлення економіки Донбасу Fomichenko, I. Barkova, S. Social and economic problems of Donbas The article deals with the specifics of Donbas regional development from the point of view of the introduction of decentralization processes in a situation of armed conflict and a high degree of political and socioeconomic uncertainty. The features of the formation of local budgets of Donetsk region are determined. The proposed improvement of the policy of intergovernmental transfers of security of the eastern region, which involves the development of strategic documents of socio-economic development by each united territorial community. У статті розглянуто специфіку регіонального розвитку Донбасу з позицій впровадження децентралізаційних процесів в умовах збройного конфлікту і високого ступеня політичної та соціально-економічної невизначеності. Встановлено особливості формування місцевих бюджетів Донецької області. Запропоновано удосконалення політики міжбюджетних трансфертів забезпеченості східного регіону, що передбачає розробку стратегічних документів соціально-економічного розвитку кожною об’єднаною територіальною громадою. В статье рассмотрена специфика регионального развития Донбасса с позиций внедрения децентрализационных процессов в условиях вооруженного конфликта и высокой степени политической и социально-экономической неопределенности. Установлены особенности формирования местных бюджетов Донецкой области. Предложено усовершенствование политики межбюджетных трансфертов обеспеченности восточного региона, которая предусматривает разработку стратегических документов социально-экономического развития каждой объединенной территориальной общиной. 2018 Article The influence of financial decentralization on the restoration of the economy of Donbas / I. Fomichenko, S. Barkova // Економічний вісник Донбасу. — 2018. — № 4 (54). — С. 12-17. — Бібліогр.: 12 назв. — англ. 1817-3772 https://nasplib.isofts.kiev.ua/handle/123456789/150144 332.142:338.244.47+338.246.8(477.62) en Економічний вісник Донбасу application/pdf Інститут економіки промисловості НАН України
institution Digital Library of Periodicals of National Academy of Sciences of Ukraine
collection DSpace DC
language English
topic Social and economic problems of Donbas
Social and economic problems of Donbas
spellingShingle Social and economic problems of Donbas
Social and economic problems of Donbas
Fomichenko, I.
Barkova, S.
The influence of financial decentralization on the restoration of the economy of Donbas
Економічний вісник Донбасу
description The article deals with the specifics of Donbas regional development from the point of view of the introduction of decentralization processes in a situation of armed conflict and a high degree of political and socioeconomic uncertainty. The features of the formation of local budgets of Donetsk region are determined. The proposed improvement of the policy of intergovernmental transfers of security of the eastern region, which involves the development of strategic documents of socio-economic development by each united territorial community.
format Article
author Fomichenko, I.
Barkova, S.
author_facet Fomichenko, I.
Barkova, S.
author_sort Fomichenko, I.
title The influence of financial decentralization on the restoration of the economy of Donbas
title_short The influence of financial decentralization on the restoration of the economy of Donbas
title_full The influence of financial decentralization on the restoration of the economy of Donbas
title_fullStr The influence of financial decentralization on the restoration of the economy of Donbas
title_full_unstemmed The influence of financial decentralization on the restoration of the economy of Donbas
title_sort influence of financial decentralization on the restoration of the economy of donbas
publisher Інститут економіки промисловості НАН України
publishDate 2018
topic_facet Social and economic problems of Donbas
url https://nasplib.isofts.kiev.ua/handle/123456789/150144
citation_txt The influence of financial decentralization on the restoration of the economy of Donbas / I. Fomichenko, S. Barkova // Економічний вісник Донбасу. — 2018. — № 4 (54). — С. 12-17. — Бібліогр.: 12 назв. — англ.
series Економічний вісник Донбасу
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fulltext I. Fomichenko, S. Barkova 12 Економічний вісник Донбасу № 4(54), 2018 UDC 332.142:338.244.47+338.246.8(477.62) I. Fomichenko, PhD (Economics), S. Barkova, assistant Donbass State Machine Building Academy, Kramatorsk THE INFLUENCE OF FINANCIAL DECENTRALIZATION ON THE RESTORATION OF THE ECONOMY OF DONBAS Problem Statement. On the modern stage of de- velopment of Ukraine as the democratic, social and legal state taking into account global changes that took place lately, development of local self-government is one of priority directions of public policy. The process of fi- nancial decentralization begun in Ukraine directly influ- ences on the decision of economic problems of develop- ment of the destroyed potential of Donbas. Proceeding in the economy of Donbas needs more complete use of resources of development, that have local character, strengthening of market principles of menage, examin- ing the not so much scales of spatial sizes of territories, how much factors of cooperation of agents of demand and supply on certain territories. Financial decentraliza- tion gives new possibilities to influence on regional eco- nomic progress trends from the side of population, terri- torial communities and local elites. Actuality of research theme is conditioned by that a specific of regional de- velopment of Donbas is from positions of introduction of decentralization processes in the conditions of the armed conflict and high degree of political and so- cially – economic vagueness studied while not enough. Analysis of the last researches and publications. Directly the home economists devoted the labours the study of problems of local finances and interbudgetary relations of V. Kravchenko, О. Vasilik, S. Bukovinsky, О. Kirilenko, I. Lunina. Problems of proceeding in the economy of Donbas and research of consequences of the Russian-Ukrainian conflict mostly came true at all- Ukrainian level in labours of І. Grozny [1], R. Pro- kopenko [2] but other. The different aspects of concept of decentralization, her conceptions, kinds are investi- gated by the modern Ukrainian and foreign scientists. In this way, G. Arikan worked out the theoretical model of financial decentralization; R. Bal and J. Martinez-Vas- quez educed intercommunication of realization of re- form of financial decentralization and institutional de- sign of country; N. Bikadorova, O. Drozdovskaya inves- tigated essence of financial decentralization; K. Kaiser are her kinds; V. Bodrov [3] and S. Dyachenko [3] con- sidered decentralization as an instrument for strengthen- ing the material and financial basis of local self-govern- ment. The purpose of the article is to study the impact of financial decentralization on the restoration of the Don- bas economy and to determine the peculiarities of the formation of local budgets of the Donetsk region. Presentation of the main research material. The economic system of the border regions in the east of the country is an important part of the Ukrainian economy as a whole. Creating conditions for optimal interaction between different border territorial associations requires a systematic approach and a full account of the diversity of directions and forms of interregional economic rela- tions. The Russian-Ukrainian conflict, which in 2014 year into armed confrontation and annexation of territo- ries, led to significant changes in the foreign economic activity of Ukrainian industrial regions, in particular, Donbas. For the Donetsk region, which was at the epi- center of the military conflict, the availability of finan- cial decentralization and strategic planning of the deve- lopment of territories is a prerequisite for a comprehen- sive recovery based on the principles of sustainable de- velopment. It is the processes of financial decentraliza- tion that can contribute to increasing the resource base of local self-government and the effectiveness of its use, innovation, human resource development and entrepre- neurship, and improvement of the ecology of the Don- bas [4]. The success of financial decentralization largely depends on the degree of participation of the united ter- ritorial communities (OTG) in the processes of manag- ing the resource potential of the region. The role of united territorial communities in ensuring the interests of citizens in all spheres of life in the respective territory should become a key. For example, in order to stimulate civic responsibility at the local level and motivate the population to voluntarily pay taxes, local authorities should inform and involve them at all stages of decision making of local significance. The relevance of the study was due to the fact that in Ukraine only the correspond- ing regulatory, legal, economic, organizational, infor- mational, and social mechanisms of strategic planning of territories development in the conditions of financial decentralization were created. The creation of united territorial communities in the Donetsk region will con- tribute to further socio-economic development of the territories. In Ukraine, during 2016-2018, there has been a rapid increase in the number of OTGs, but there is no proportional increase in the subvention for infrastruc- ture development. For 3 years the amount of the subven- tion for the OTG infrastructure has decreased by 3.4 mil- lion UAH / unit. while simultaneously increasing the OTG by 506 units (Fig. 1). I. Fomichenko, S. Barkova 13 Економічний вісник Донбасу № 4(54), 2018 159 366 665 6,3 4,1 2,9 0 1 2 3 4 5 6 7 0 100 200 300 400 500 600 700 01.01.2016 01.01.2017 01.01.2018 U A N .m ill io n. un its . Number of OTG The amount of subvention per unit of OTG Fig. 1. The ratio of the amount of subvention to the OTG infrastructure and the number of OTGs [5] Such a situation demulges the community to unite and diminish opportunities for social and economic de- velopment. Therefore, it is necessary to improve the fi- nancial system for providing funds to united territorial communities, namely to increase the size of the subven- tion in proportion to the number of OTG. Another prob- lem hampering the development of OTG in Ukraine is that the creation of united territorial communities is not supported by the population. Most residents of territorial communities are detached from the process of the adop- tion and implementation of management decisions either because of their own indifference or open reluc- tance of local government officials to involve citizens in managing local affairs. Among the areas of improve- ment of the development of territorial communities, it is expedient to highlight the revision of the mechanisms of budgetary equalization. In particular, we consider it un- reasonable to equalize the tax capacity of the territories only on income from the value added tax of individuals and income tax. It would be worthwhile to include in the calculation and revenues of local budgets from rent pay- ments. In Ukraine, this issue was repeatedly raised, in 2016 two bills were registered to include a certain per- centage of rent payments to local budgets. In 2018, only one law "On Amendments to the Budget Code of Ukraine for the Inclusion of Rent Payment for the Use of Subsoil for the Extraction of Oil, Natural Gas and Gas Condensate" came into force on January 1, 2018. In ac- cordance with the law, 5% of rent from the sale of hy- drocarbons should be transferred to local budgets of dif- ferent levels. Of these, 2% will be credited to oblast budgets, 2% to district budgets and 1% to budgets of city, village, and village councils [6]. But this law pro- vides for a total deduction of only 5% of rent payments to local budgets, although the second version of the law specified 10%. Therefore, it is worth reconsidering the approach to determining the share of rent that is trans- ferred to local budgets, as this is important for those ter- ritories where the quality of drinking water deteriorates as a result of fossil fuels, limiting the size of territories suitable for agricultural activity, and the destruction of highways. This must be done in order to ensure that the OTGs on whose territory the extractive activities are carried out have additional resources to restore the in- frastructure, improve the living standards of the local population and improve the ecological situation [7]. In the last two years, Ukraine, in accordance with the course on European integration, is actively imple- menting reforms to decentralize territorial development. The financial aspects of decentralization are aimed at in- creasing the financial capacity of the united territorial communities. As a result of the territorial reform in Ukraine, three levels of local self-government have been formed: the oblast (or region), the district and the com- munity consisting of several populated areas that have been united. In accordance with the decisions of the Central Election Commission on October 25, 2015, the first elections of the heads and deputies of the 3 OTGs took place in the Donetsk region, which arose as a result of the unification of 20 local councils (65 settlements). The total area of OTG amounted to 1738 km.q., which is 6.6% of the area. The population of OTG is 57.3 thou- sand people, which occupies 1.3% of the total popula- tion of the region [8]. During the first six months of 2016 in Donetsk oblast, the actual revenues of the general fund of local budgets of OTGs of the region (with the transfer from the state budget) amounted to 133 million UAH. which is more than 1.7 times compared to reve- nues of the same period last year. In the first half of I. Fomichenko, S. Barkova 14 Економічний вісник Донбасу № 4(54), 2018 2016, local budgets of OTG from the state budget re- ceived an educational subvention worth 36 million UAH, a medical subvention amounted to 18 million UAH, a subvention for infrastructure development – 12 million UAH. All local budgets of OTGs of the re- gion for the first half of 2016 exceeded the planned in- dicators of total fund revenues approved for the relevant period. The largest percentage of over-fulfillment of planned indicators in Cherkasy OTG is 23% [8]. The as- sociation of communities of Donetsk region has allowed to increase own receipts of budgets of OTG for 1 inha- bitant of the corresponding territory. On average, this indicator (compared to the first half of 2015) increased by 1110 UAH. (from UAH 708 to UAH 1818). There is a differentiation in the amount of funds received. Thus, in Shakhovsk OTG received the largest amount of funds per inhabitant - UAH 3904, the smallest similar figure was in Cherkasy OTG – UAH 400 per inhabitant. As a comparison, we would like to note that on the basis of 1 person the most amount of money is received by a res- ident of Verbkivska OTG of the Dnipropetrovsk re- gion – UAH 7,257. Based on the financial resources of OTG in the first half of 2016, funds were allocated to development costs (capital expenditures) for a total amount of UAH 6 million. including repair of roads, construction, landscaping and housing and communal services – 2 million UAH, repair and reconstruction of institutions of social and cultural sphere – 3 million UAH [8]. On December 28, 2014, the Verkhovna Rada of Ukraine adopted the Law of Ukraine "On Amendments to the Budget Code of Ukraine on the Reform of Inter- governmental Fiscal Relations" [9], according to which a new stage of financial decentralization has been launched since 2015. These changes regulated, in par- ticular, the budgetary relations related to the intro- duction of a new model of financial provision of local budgets and intergovernmental fiscal relations. As is known, in the system of local finances central place be- longs to local budgets, which, on the one hand, are do- cumentary bearers of local finances, and on the other hand, constitute a plan for the creation and use of finan- cial resources necessary for the fulfillment of the tasks of local self-government bodies. Their independence is guaranteed by their own and national income assigned to them, as well as the right to independently determine the use of funds from local budgets. Today, the main factor influencing the formation of local budgets in the Donetsk region is the conduct of hostilities on its terri- tory. Territories in which hostilities are taking place and temporarily occupied remained virtually without legiti- mate authorities. The question of the breakdown of ad- ministrative-territorial units as a result of the anti-terror- ist operation remains relevant. As an interim solution, it is proposed to join parts of the districts where the state authorities do not exercise their powers to the neighbor- ing regions where the Ukrainian authorities operate. The significant differentiation of the local budgets of the Do- netsk region is determined both by the territorial charac- ter and the development of the infrastructure, and by cer- tain differences in the structure of the needs of budget financing and the policy of budget equalization. Among the main features of the formation of local budgets of the Donetsk region are: – excessive shredding (excessive number of village councils and the presence of cities with a population of less than 20 thousand people); – significant disparities in the level of socio-eco- nomic development of territories, the presence of areas with significant differences in quantitative and qualita- tive indicators. For example, the population of Volnova district largest in the region is 104.1 thousand people, and the population Dobropil district – only 16.1 thou- sand people (almost 6.5 times less), which in some way reflected in the formation of the revenue part of the local budget [9]; Grant funds are a separate source of financing for local economic development in the Donetsk region – these are resources provided to finance the needs of lo- cal economic development in the form of international technical assistance, grants from international donors, charitable donations and donations. In order to ensure the sustainable development of the Donetsk region in conditions of decentralization, it is necessary to carry out an institutional transformation of local self-government bodies and local executive authorities by modernizing the administrative-territorial system of the oblast, which involves reducing the dis- proportions in size between administrative-territorial units of the same level; the formation of reasonable size of administrative-territorial units and the non-inclusion of settlements into other settlements (thus there will be no large disproportions in the size and population of the regions in the region; strengthening control over the tar- geted and efficient use of budget funds that can be im- plemented through public involvement to the budget process and to ensure its publicity and transparency, ac- cess to budget information for citizens, to promote fur- ther democratization of the activities of the Territ cal authorities, primarily through increased use of instru- ments of direct democracy (enhancing the role of local initiatives, involving civil society to solve community problems). These proposals will provide the sources of the lo- cal budget of the Donetsk region with the necessary in- frastructure, personnel, organizational, and financial re- sources. The consequences of the military conflict on the territories of Donetsk and Luhansk oblasts were sub- ject to numerous systemic problems of the economic de- velopment of the region, which in some way reflected the implementation of the decentralization reform in these territories. Creation of a modern system of local self-government in the Donbas is complicated by the ac- tion of certain problems specific to this region: I. Fomichenko, S. Barkova 15 Економічний вісник Донбасу № 4(54), 2018 – different deterioration in the socio-economic si- tuation and the threat of decline of former industrialized areas as a result of hostilities on part of its territory; – the cessation of the movement of goods through the collision line within the Donetsk and Luhansk ob- lasts, which has become another catalyst for the strengthening of the trend towards the stagnation of these territories; – the need to find new markets for goods in foreign markets, the development of new types of products and redevelopment of production. There is a change in the sectoral specialization of the regional economy, in par- ticular the directions of export-oriented production. The financial decentralization of the Donbas is aimed at solving these problems by overcoming signifi- cant contradictions in the regulatory and legislative framework; stabilizing sources of local budget revenues and developing an effective mechanism for interre- gional redistribution of state revenues; the improvement of inter-budgetary relations, which is due to their incon- sistency with the rapid changes taking place in the east of the country. The modern system of distribution of budget funds between different levels of government should be guided by the solution of problems aimed at achieving a balanced budget both "vertical" and "hori- zontally". The conducted research shows that the redis- tribution of local budget revenues after budget decen- tralization in Ukraine for 2014-2016 took place in favor of cities of oblast significance and newly formed united territorial communities, while the largest losses were borne by regional budgets whose share in the structure of incomes has decreased from 28.9% in 2014 to 24.4% in 2016 (Тabl. 1). Such structural changes are related to the reduction of the role of areas in the financial provi- sion of development of territories. The oblast lost first of all because of the reduction in the share of personal income tax revenues from 25% to 15% in 2015. And these losses were obviously higher than those they re- ceived from the new share of the corporate profit tax (10%). Also, in 2016, the subvention for the training of labor personnel that was in 2015 was canceled. Table 1 Structure of revenues and expenditures of local budgets by budget levels 2014-2016 Years Indicator Total Region Cities of oblast significance Areas OTG Territorial com- munities of the baseline level 2014 Revenues without transfers 100 37.9 39.8 9.9 0 12.4 2016 100 33.6 39.9 11.9 2.1 8 2014 Income from trans- fers 100 28.9 33.8 30 0 7.3 2016 100 24.4 35.5 30.9 1.9 7.4 2014 Expendi- tures 100 28.7 33.8 30.5 0 6.9 2016 100 23.4 36.3 31.7 1.7 6.8 The growth of the share of revenues of cities of ob- last significance occurred at the expense of a 10% tax on profit of non-communal enterprises and new revenues from excise taxes, which obviously exceeded the losses that cities of oblast significance suffered due to the re- duction of their share in the split personal income tax (PIT) from 75 to 60%. Redistribution of expenditures of local budgets in 2016 in comparison with 2014, there was an increase in the role of budgets of cities of oblast significance, districts and united territorial communities in ensuring socio-economic development of territories. The oblast began to lose its position in financing the main sectors - education and health, while the powers to finance these industries increased in cities of oblast sig- nificance. About half of the expenditures of the public administration sector are concentrated in the territorial communities of the base level – 46.3% in 2014. In 2016, revenues from transfers for cities of re- gional subordination and districts were less than their total expenditure, indicating vertical financial imba- lances. Thus, the transfer to local budgets of additional financial burdens without the expansion of the financial base contributes to the threat that revenues coming to local budgets will not correspond to the amount of powers that are planned to be transferred for implemen- tation by local governments. From year to year, the powers of local authorities are growing, so, since 2016, financing of vocational education from local budgets has become a significant burden on budgets of cities of oblast significance [10]. Positive factor of the impact of financial decentra- lization on the restoration of the Donbas economy should be the tendency of a growing share of transfers in the total volume of local budget revenues, which will allow to accelerate the growth of export of goods from the Donetsk region and will contribute to the increase of capital investments in the region. As of January-Sep- tember 2017, enterprises and organizations of the region (without taking into account part of the area of the anti- terrorist operation) have absorbed 8.3 billion UAH at the expense of all sources of financing. of capital invest- ments, which is 23.9% more than in the same period of I. Fomichenko, S. Barkova 16 Економічний вісник Донбасу № 4(54), 2018 2016 in comparable prices. The main source of financ- ing of capital investments is the own funds of enterprises and organizations, the share of which amounted to 85.2%. At the expense of the state budget, 2.2% of cap- ital investments were invested, the share of local budget funds was 10.1%, loans to banks and other borrowings accounted for 1.1%. In January-September 2017, the ex- port of goods from the Donetsk region (without taking into account part of the area of the anti-terrorist opera- tion) amounted to 3514.5 million USD. The United States, which is 24.3% more than in January-September 2016. Enterprises of the region exported products to 108 countries of the world. In the first place Italy, where in January-September 2017 exports of goods amounted to 763.7 million dollars, which is 35.7% more than in Ja- nuary-September of the previous year, and amounted to 21.7% of the total. Exports of all goods to the European market increased by 21.0% compared to January-Sep- tember 2016. The Russian Federation took the second place, deliveries to this country in January-September 2017 compared to January-September 2016 increased by 18.9% and amounted to 569.9 million dollars. or 16.2% of the total volume. In 1,9 times, in January-Sep- tember 2017, in comparison with the previous year, for- eign exchange earnings from the export of goods in the USA amounted to 311.1 million dollars. or 8.9% (third place) [12]. Conclusions. Taking into account the above re- sults of the research and the unstable political state of Ukraine in recent years, improvement of the policy of intergovernmental transfers of security of the eastern re- gion is necessary. Each united territorial community should develop strategic documents for socio-economic development. The share of expenditures financed by lo- cal budget revenues has slightly increased over the past two years, indicating a higher degree of financial auto- nomy for regional expenditures. Further strategic deve- lopment of the Donetsk region is connected with the de- velopment of the methodology of planning, improve- ment of economic, organizational and personnel provi- sion of this process. Literature 1. Грозный И.С., Прокопенко Р.В. Анализ влия- ния российско-украинского конфликта на промышлен- ность Украины. Вестник ДГМА. 2015. №3(36). С.211- 215. 2. Прокопенко Р.В. Анализ перспектив отраслей украинской экономики при выходе из кризиса. Управ- ління економікою: теорія та практика. Четверті Чу- маченківські читання: зб. наук. праць. Київ, 2015. С.156-165. 3. Бодров В. Г., Дяченко С. А. Бюджетна та фінансова децентралізація як інструмент зміц- нення матеріально-фінансової основи місцевого само- врядування : навч.-метод. матеріали. Київ : НАДУ, 2015. 101 с. 4. Ляшенко В.І., Прокопенко Р.В., Дзюба С.В. Сценарії ринкової орієнтації зовнішньоекономіч- ної діяльності Придніпровського економічного району в сучасних умовах. Економічний вісник Донбасу. 2017. № 2 (48). С. 75-89. 5. Децентралізація дає можливості: офіційний сайт URL: http://decentralization.gov.ua/. 6. Про внесення змін до Бюджетного кодексу України щодо зарахування рентної плати за користування над- рами для видобування нафти, природного газу та газо- вого конденсату: Закон України від 20.12.2016 р. № 1793-VIII. URL: http://zakon3.rada. gov.ua/laws/show/ 1793-19. 7. Територіальний розвиток та регіональна політика в Україні: актуальні проблеми, ризики та пе- рспективи адміністративно-фінансової децентралізації / наук. ред. В.С. Кравців; НАН України, ДУ «Інститут регіональних досліджень імені М. І. Долішнього НАН України». Львів, 2017. С.83. 8. Децентралізація. Міс- цеві бюджети 159 об’єднаних територіальних громад. 2015 – 2016 (прогноз). URL: http:// www.minregion.gov. ua/decentralization/presentation/finansovadetsentralizatsi ya -v-diyi/ (21.12.2016). 9. Головне управління статис- тики у Донецькій області: офіційний сайт. URL: http://www.donetsk stat.gov.ua. 10. Про державний бю- джету України на 2016 р.: Закон України. URL: com/ukrajiny-zakony/zakon-ukrajini-pro-derjavniy-byud jet-ukrajini2016. html. 11. Про державний бюджету Ук- раїни на 2018 р.: Закон України. URL: http://zakon. rada.gov. ua/go/2246-19. 12. Социально-экономиче- ское положение Донецкой области в январе-ноябре 2017 года / Главное управление статистики в Донецкой области. URL: http: // www. sovet.donbass.com. References 1. Groznyi Y.S., Prokopenko, R.V. (2015). Analyz vlyianyia rossyisko-ukraynskoho konflykta na promysh- lennost Ukrayny [Analysis of the influence of the Russian- Ukrainian conflict on the Ukrainian industry]. Vestnyk DHMA – Herald of the DMAA, 3(36), рр. 211-215 [in Russian]. 2. Prokopenko, R.V. (2015). Analiz perspektiv otraslei ukraynskoi ekonomiki pri vykhode yz kryzysa [Analysis of prospects of industries of Ukrainian economy on leaving from the crisis]. Upravlinnia ekonomikoiu: teoriia ta praktyka. Chetverti Chumachenkivski chytannia – Economics Management: Theory and Practice. Fourth Chumachenko reading, рр. 156-165 [in Ukrainian]. 3. Bodrov V. H., Diachenko S. A. Biudzhetna ta finansova detsentralizatsiia yak instrument zmitsnennia materialno-finansovoi osnovy mistsevoho samovriadu vannia [Budgetary and financial decentralization as an in- strument for strengthening the financial and financial basis of local self-government]. (2015). Kyiv : NAРА [in Ukrainian]. 4. Liashenko V.I., Prokopenko R.V., Dziuba S.V. (2017). Stsenarii rynkovoi oriientatsii zovnishnoekono michnoi diialnosti Prydniprovskoho ekonomichnoho raionu v suchasnykh umovakh [Scenarios of the market orientation of foreign economic activity of the Prid- neprovsky economic region under perfect conditions]. Ekonomichnyi visnyk Donbasu – Economic Herald of the Donbas, 2 (48). рр. 75-89 [in Ukrainian]. 5. Detsentralizatsiia daie mozhlyvosti [Decentraliza- tion provides opportunities]. (n.d.). decentralization. I. Fomichenko, S. Barkova 17 Економічний вісник Донбасу № 4(54), 2018 gov.ua. Retrieved from http://decentralization.gov.ua/ [in Ukrainian]. 6. Pro vnesennia zmin do Biudzhetnoho kodeksu Ukrainy shchodo zarakhuvannia rentnoi platy za korys- tuvannia nadramy dlia vydobuvannia nafty, pryrodnoho hazu ta hazovoho kondensatu: Zakon Ukrainy vid 20.12.2016 r. № 1793-VIII [On Amendments to the Budget Code of Ukraine regarding the enrollment of rent for the use of mineral resources for the extraction of oil, natural gas and gas condensate: Law of Ukraine dated December 20, 2016 No. 1793-VIII]. zakon3.rada.gov.ua. Retrieved from http://zakon3.rada.gov. ua/laws/show/1793 -19 [in Ukrainian]. 7. Kravtsiv V.S. (Еd.). (2017). Terytorialnyi rozvytok ta rehionalna polityka v Ukraini: aktualni problemy, ryzyky ta perspektyvy administratyvno-finansovoi detsen- tralizatsii [Territorial development and regional policy in Ukraine: actual problems, risks and prospects of adminis- trative and financial decentralization]. Lviv, Institute of Regional Research named after M.I. Dolishniy of the NAS of Ukraine [in Ukrainian]. 8. Detsentralizatsiia. Mistsevi biudzhety 159 obied- nanykh terytorialnykh hromad. 2015 – 2016 (prohnoz) [Decentralization. Local budgets of 159 united territorial communities. 2015-2016 (forecast)]. (n.d.). www.min region.gov.ua. Retrieved from http:// www.minregion. gov.ua/decentralization/presentation/finansovadetsentrali zatsiya-v-diyi/ [in Ukrainian]. 9. Holovne upravlinnia statystyky u Donetskii oblasti [The Main Department of Statistics in Donetsk Oblast]. (n,d,). www.donetsk stat.gov.ua. Retrieved from http://www.donetsk stat.gov.ua [in Ukrainian]. 10. Pro derzhavnyi biudzhetu Ukrainy na 2016 r.: Zakon Ukrainy [On the State Budget of Ukraine for 2016: The Law of Ukraine]. (n.d.). Retrieved from https://зако- нодавство.com/ukrajiny-zakony/zakon-ukrajini-pro- derjavniy-byudjet-ukrajini2016.html [in Ukrainian]. 11. Pro derzhavnyi biudzhetu Ukrainy na 2018 r.: Zakon Ukrainy [On the State Budget of Ukraine for 2018: The Law of Ukraine]. (n.d.). zakon.rada.gov.ua. Retrieved from http://zakon.rada.gov. ua/go/2246-19 [in Ukrainian]. 12. Sotsial'no-ekonomicheskoye polozheniye Donet- skoy oblasti v yanvare-noyabre 2017 goda [The socio-eco- nomic situation of the Donetsk region in January-November 2017]. Main Department of Statistics in the Donetsk region. (n.d.). Retrieved from http: // www. sovet.donbass.com [in Russian]. Фоміченко І. П., Баркова С. О. Вплив фінансо- вої децентралізації на відновлення економіки Дон- басу У статті розглянуто специфіку регіонального роз- витку Донбасу з позицій впровадження децентраліза- ційних процесів в умовах збройного конфлікту і висо- кого ступеня політичної та соціально-економічної не- визначеності. Встановлено особливості формування місцевих бюджетів Донецької області. Запропоновано удосконалення політики міжбюджетних трансфертів забезпеченості східного регіону, що передбачає роз- робку стратегічних документів соціально-економіч- ного розвитку кожною об’єднаною територіальною громадою. Ключові слова: фінансова децентралізація, об’єд- нана територіальна громада, міжбюджетні трансферти, місцеві бюджети, капітальні інвестиції. Фомиченко И. П., Баркова С. А. Влияние фи- нансовой децентрализации на восстановление эко- номики Донбасса В статье рассмотрена специфика регионального развития Донбасса с позиций внедрения децентрализа- ционных процессов в условиях вооруженного кон- фликта и высокой степени политической и социально- экономической неопределенности. Установлены осо- бенности формирования местных бюджетов Донецкой области. Предложено усовершенствование политики межбюджетных трансфертов обеспеченности восточ- ного региона, которая предусматривает разработку стратегических документов социально-экономиче- ского развития каждой объединенной территориаль- ной общиной. Ключевые слова: финансовая децентрализация, объединенная территориальная община, межбюджет- ные трансферты, местные бюджеты, капитальные ин- вестиции. Fomichenko I., Barkova S. The influence of finan- cial decentralization on the restoration of the economy of Donbas The article deals with the specifics of Donbas re- gional development from the point of view of the introduc- tion of decentralization processes in a situation of armed conflict and a high degree of political and socioeconomic uncertainty. The features of the formation of local budgets of Donetsk region are determined. The proposed improve- ment of the policy of intergovernmental transfers of secu- rity of the eastern region, which involves the development of strategic documents of socio-economic development by each united territorial community. Keywords: financial decentralization, united territo- rial community, intergovernmental transfers, local bud- gets, capital investments. Received by the editors: 02.08.2018 and final form 14.12.2018