Baietul H., Postgraduate Student at the Department of Public, Corporate Finance and Financial Intermediation Yuriy Fedkovych Chernivtsi National University, Chernivtsi, Ukraine

ORCID ID: 0000-0003-0699-0538
e-mail: g.baietul@chnu.edu.ua

Assessment of the Budget Mechanism in the Context of Financial Decentralization

Introduction. The article investigates essence and value of budgetary mechanism on social and economic development of the state and regions. It is established that the effectiveness of the budgetary mechanism depends on its flexibility. This allows budget mechanism to respond promptly to the smallest changes in the budget system in accordance with the condition of the budget policy. The active implementation of financial decentralization started in 2014. This led to changes in the structure of the budgetary mechanism. The basis for assessing the functioning effectiveness of the budgetary mechanism is to achieve the optimal balance between own local budget revenues and the transfers that come to them.

The purpose of the article is to make conceptual definition of the budget mechanism essence, criteria for its evaluation and definition of ways to increase its effectiveness. Effective formation and use of budget resources ensures the successful functioning of the state’s economy.

Results. The consolidated budget of Ukraine is a set of indicators of the State Budget is Ukraine and local budgets which investigating for determined its role in achieving socio – economic development of the country.  The level of efficiency of relations between budgets of all levels is determines the effectiveness of the state budget policy and promotes economic stability and social welfare of the population. It is the generalizing indicator that gives a notion of the budget of the country’s policy in the context of the state and local budgets implementation.

Conclusions. A lot part of practically all types of interbudgetary transfers grows in the profits of local budgets .It does not provide in a complete measure financial independence of  local self-government and contradicts positions of decentralization realization.

Keywords: budget; budgetary policy; budgetary mechanism; budgetary process; decentralization.

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