G.M. MURZANOVSKIY's scientific contributions

Topicality. Reforming of the state regional policy and increasing of the socio-economic level of development of administrative-territorial units require comprehensive research and study of the experience of foreign countries regarding the methods of forming budget resources and finding an effective model of budget equalization, which is especially relevant in the context of the decentralization reform.Aim and tasks. To carry out the analysis of budget equalization systems in the countries of the Organization for economic cooperation and development, and to substantiate the possibility of using foreign experience of budget equalization in Ukraine.Research results. In foreign practice, several basic models of budget equalization are distinguished: horizontal and vertical equalization of income or expenses. A representative taxation system with a standard set of taxes is used to assess the possibility of revenue collection. The expenses equalization model compared to the income equalization model provides an answer to the question of whether the community has become capable, or how close it has come to it. A necessary condition for the application of this model is the availability of expenses standards for the provision of public services. The "gap-filling" fiscal equalization model combines expenditure and income equalization into a single transfer designed to fill the gap between financial needs and income. In practice, there are very few countries that use only one of the budget equalization models. Basically, there is a combination of different models and methods of horizontal and vertical equalization of income and expenses. The basis of the construction of budget equalization systems are the coefficients and formulas used to determine the size of equalization transfers. Systems that include elements of income equalization usually rely on a standard set of taxes and standard tax rates. At the same time, one of the solutions is to use a small set of taxes. Expenses equalization systems are more complex because cost estimation often involves a large number of factors. In some countries, regression-based standardized costing approaches have been used. Budget equalization systems are not static entities, the norm of the need for their periodic analysis and evaluation is often included in the legislation underlying them. Such an analysis can lead to reforms of budget equalization systems. Several key factors motivating the reform of equalization systems were identified: growing or high levels of inequality in the fiscal capabilities of communities, regional incomes or the provision of public services; insufficient fiscal autonomy; unstable and non-transparent budget alignment; inadequate incentives and lack of political neutrality in the budget equalization system. Reform of budget equalization systems in OECD countries is carried out in the following directions: transition to systems based on rules; increasing the fiscal autonomy of communities; simplification of alignment formulas; simplification of the representative tax system; periodic review of alignment formulas.Conclusion. In practice, there are very few countries that use only one of the budget equalization models. Basically, there is a combination of different models and methods of horizontal and vertical equalization of income and expenses. The basis of the construction of budget equalization systems are the coefficients and formulas used to determine the size of equalization transfers. The income equalization system relies on a standard set of taxes and standard tax rates. Cost equalization systems are more complex because cost estimation often involves a large number of factors. Budget equalization systems are not static entities, the norm of the need for their periodic analysis and evaluation is often included in the legislation underlying them.

Topicality. The urgency of the article is substantiated by an excessive centralization of powers and financial and material resources of the executive branch, the inability of territorial communities at the district level to exercise their powers, limited access to public services due to lack of funding and deterioration of local government infrastructure as well as reduced professionalism of officials. There is a need for scientific substantiation of scenarios for further implementation of the decentralization reform in terms of determining the rational balance of powers and tasks to be allocated to the district level of government with an appropriate financial support. The experience of forming enlarged administrative-territorial entities at the district level in Ukraine is a modern interpretation and development of European approaches to the definition of functional areas and statistical units according to NUTS-3, which determines the relevance of this study not only at the national but also at the Pan-European level within the context of development of applied principles of the regional development theory.Aim and tasks. The objectives of this study are: to analyze the state of the reform of local self-government at the district level, to consider possible options and scenarios for further implementation of this process, to determine a list of powers that should be transferred to the district level, and to propose measures of material, financial and organizational support.Research results. The peculiarity of a new districts formation in Ukraine is that the districts, which include regional centers, have a number of population several times higher than in other districts of the region. This does not comply with the European standard NUTS-3, which specifies a number of population in districts from 150 thou people to 800 thou people. The concept of local self-government reforming and territorial organization of power provides for the transfer of powers at the district level from executive power bodies to executive bodies of district councils; however the executive bodies of district councils have not been created yet, given that the relevant adjustments to the legislation have not been made. On September 17, 2020, the Verkhovna Rada adopted the Law of Ukraine "On Amendments to the Budget Code of Ukraine to Align the Provisions of Budget Legislation in Connection with the Completion of Administrative and Territorial Reform." This legislative act abolishes personal income tax revenues directed to district budgets, which is the main source of their funding. The district level is also excluded from the system of horizontal equalization, hence district budgets will not receive a basic subsidy and will not be engaged in direct inter-budgetary relations with the state budget and they are excluded from the list of "recipients" of educational and medical subventions. The revenues structure of district budgets’ general fund, which is enshrined in the new Article 64 of the Budget Code of Ukraine, narrows their revenue base dramatically. The district level of local self-government is almost leveled, and it is deprived of most powers and financial resources, as a result, it cannot represent common interests of territorial communities at the basic level, which contradicts a principle of subsidiarity, and an issue of expediency of further existence of the district level of local self-government will be raised in the near future. The article considers possible options for further reform of the district level of local self-government, namely: (1) liquidation of the district level of local self-government, (2) preservation of existing state of the district level of local self-government, (3) preservation of the district level of local self-government, while giving it authority and financial resources to represent the common interests of territorial communities of the basic level. A draft of powers, which should be transferred to the district level of local self-government, has been proposed.Conclusions. The amendments to the legislation made in 2020 have led to a situation where the district level of local self-government was deprived of a larger share of its revenues and was significantly limited in its powers. As a result, the local self-government at the district level cannot fully represent common interests of territorial communities of the basic level in accordance with Article 140 of the Constitution of Ukraine and the principle of subsidiarity. This raised a question on expediency of the existence of the local self-government at the district level. Possible options for its further reform have been considered in the article. The most expedient option is to preserve the district level of local self-government and provide it with powers and financial resources so that it would be able to represent common interests of territorial communities of the basic level. The list of powers to be transferred to the district level has been determined.

Topicality. It is caused by excessive centralization of powers and financial and material resources by the executive authorities, the inability of the territorial communities of the basic level to fulfill their powers, the deterioration of the quality and availability of public services due to the lack of financial and material provision. Aim and tasks. To investigate the economic aspects of administrative-territorial reform in Ukraine, to identify the main problems of financial provision of territorial communities of the baseline level. Research results. The model of budget relations implemented is aligned not by expenditures, but by income. Such a mechanism has a motivational component regarding the interest in increasing the revenue base of local budgets. At that time, the transition to equalization of local budgets by income led to an increase in the differentiation of communities. Most benefit was given to cities of regional significance whose incomes have increased significantly. Local government revenues consist of own revenues and transfers from the central level. Over the past 20 years, the tendency towards a decrease in the share of local budget revenues and the increase in the share of state budget revenues in the consolidated budget of Ukraine (without intergovernmental transfers) has been observed. The share of local budget revenues without transfers (own revenues) decreased by 1,5 times from 31,4 % in 2002 to 20,9 % in 2018. In the financing system of local self-government, during the study period, the share of transfers increased. The share of own revenues decreased almost 2 times, from 78,4 % in 2002 to 42,1 % in 2018, and the share of transfers increased from 21,6 % to 57,9 %, respectively. This dependence on transfers is of a serious scale: in 45 % of the united territorial communities (UTC) transfers in 2016 amounted to 75 % of revenues. The increase in the share of transfers in the budgets of local self-government, the dependence of the amount of transfers from central authorities and the inability to plan them, as well as the transfer of powers without adequate financial support, pose significant risks to the economic self-sufficiency of local communities. In 2016, 76 % of expenditures of local self-government bodies were performed on behalf of central authorities as financing of "delegated powers" (health care, education, social protection). At the same time, transfers from the central level accounted for only 57,9 % of local budget revenues. That is, a considerable part of delegated powers of local self-government bodies are forced to finance at the expense of their own income. As a result, they have little resources to fulfill their "own authority", namely the construction and repair of local roads and housing, the provision of utilities (water supply and sewerage, waste collection, heating, etc.), as well as local transport and development of " objects of culture and rest. Under the burden of current expenditures, the investment capacity of local self-government bodies is small. The authorities at the oblast and rayon level are not entirely self-governing, as regional and district levels act as local self-government bodies (regional and district councils), as well as executive bodies (oblast and rayon state administrations). The first few have very few powers, and their executive bodies are not created, although this is provided by the Concept. The latter are subordinate to the central authorities and they have a dominant role. All this complicates the assessment of changes at the regional and district levels in the context of financial decentralization. A prerequisite for the normal functioning and development of UTC is their economic self-sufficiency. This implies that the UTC revenues correspond to the expenditures necessary for the exercise of their own and delegated powers. An appropriate methodology is needed to carry out an assessment of the economic self-sufficiency of the communities. More than 4 years of decentralization reform have taken place, but there is no corresponding methodology. The lack of a methodology for assessing the economic self-sufficiency of the combined territorial is due to objective reasons. First, this is the lack of a clear and legally-established division of powers between the executive and local self-government bodies, as well as between the levels of the latter. Secondly, the lack of standards and norms of financial and infrastructural provision of public services (schools, kindergartens, paramedical outpatient departments, out-patient departments, engineering networks, etc.). Conclusions. The conducted study shows that Ukraine has a centralized system of incomes and expenditures, and the reform of financial decentralization has led to the opposite result, namely, to increase the dependence of local self-government on central authorities. The reform of financial decentralization in Ukraine tends to support a model that is more based on transfers than on its own revenue.

Topicality. It is caused by excessive centralization of powers and financial and material resources by the executive authorities, the inability of the territorial communities of the basic level to fulfill their powers, the deterioration of the quality and availability of public services owing to a lack of financial support and a deterioration of the infrastructure base of local self-government, and a decrease in the level of professionalism of officials. Aim and tasks. The research was dedicated to identifying the essence of the administrative and territorial reform in Ukraine and to analyse its implementation, to identify the main problems, to formulate a systematic view on the administrative-territorial reform, to submit proposals to improve the process of reforming of local self-government and territorial organisation of power in Ukraine. Research results. It was proved that the essence of the administrative and territorial reform consists in solving four tasks: improving the territorial division by improving of the system of administrative and territorial units and their consolidation at the basic and district levels; redistribution of powers between executive authorities and local self-government bodies and powers between local government bodies of different levels in accordance with the principle of subsidiarity; provision of territorial communities and their management bodies for the financial, material and human resources that are necessary for the exercise of their powers; the consolidation by the state authorities of the functions of monitoring the observance of the provisions of the Constitution of Ukraine and the norms of legislation by local self-government bodies. The administrative-territorial reform cannot be implemented without the parallel implementation of the reform of local self-government and administrative reform. The consolidation of administrative and territorial units has become one of the main directions of numerous reforms of public authority in European countries. It is not possible to speak of a single model of the administrative and territorial system in Europe. Administrative and territorial reform in Ukraine is inherently complex and involves a thorough and fundamental change in the system of state and local government, creating effective and self-sufficient management entities at all levels. Without the scale of reform, the government identified unrealistic terms of its implementation, narrowing the understanding of reform to a simple transfer of powers and financial resources to the basic level of local self-government without economic calculations about the possibility of exercising powers. A number of measures were proposed to improve the process of reforming local self-government and the territorial organisation of power in Ukraine in terms of updating the Concept of reforming local self-government and territorial organisation of power in Ukraine, forming a conceptual vision of the second level of administrative-territorial structure (level of districts), developing a new Methodology for the formation of capable territorial communities, reduction of dependence of local self-government on transfers from the state budget, approval of standards (norms) of providing public services both in terms of their quality, and in terms of their value. Conclusions.The practical recommendations in the article provide the basis for the development of normative acts and organisational measures aimed at improving the process of reforming local self-government and territorial organisation of authorities in Ukraine.

Topicality. This is due to the deterioration of the quality and accessibility of public services as a result of resource insecurity of communities, aging of the population and rural departures, reducing the level of professionalism of local self-government officials, excessive centralization of powers of executive power bodies and lack of financial and material resources. Purpose and tasks. Development of methodical foundations for the formation of economically viable communities at the baseline level. Results. An analysis of the methodology for the formation self-sufficiency of united territorial communities (UTC), approved by the Cabinet of Ministers of Ukraine from April 8, 2015, No. 214, showed that it can not be considered as a methodology for the formation of self-sufficiency communities. It does not contain provisions on the economic assessment of the compliance of community incomes with the costs that are necessary to ensure the provision of public services assigned to the community. The main focus of this methodology is to identify the potential administrative centers of the communities (in the first place, these are the cities of regional importance and settlements with the status of district centers) and their accessibility zones. The concept of self-sufficiency of a separate U�C is replaced by the notion of matching its per capita income to the average level among all U�Cs. The article formulated a scenario for the formation of economically self-sufficiency of communities of the baseline level, which involves a certain sequence of stages from the definition of the size of communities, the division of powers between different levels of administrative-territorial units on the principle of subsidiarity, the development of standards (norms) of public services, estimates of the costs required for the community exercising its powers and ending with legislative consolidation of the sources and volumes of community financing and its staffing. The project of distribution of powers between different levels of administrative-territorial units based on the principle of subsidiarity is proposed, which defines the level of provision of each service (community, district, region) and it is determined who has the authority to provide the service, has the opportunity and can most effectively perform the service. Conclusions. The proposed scenario for the formation of economically viable communities at the baseline level and the project of division of powers between different levels of administrative-territorial units provide the basis for developing a methodology for economically viable communities.