{"id":21384,"date":"2026-02-02T14:32:06","date_gmt":"2026-02-02T12:32:06","guid":{"rendered":"https:\/\/modecon.mnau.edu.ua\/?p=21384"},"modified":"2026-02-02T14:32:06","modified_gmt":"2026-02-02T12:32:06","slug":"foreign-experience-of-financial-equalization","status":"publish","type":"post","link":"https:\/\/modecon.mnau.edu.ua\/en\/foreign-experience-of-financial-equalization\/","title":{"rendered":"Prots N., Kosteniuk T. Foreign Experience of Financial Equalization of Local Budgets and European Thinking"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]<\/p>\n\n\n\n
JEL Classification:<\/strong> H71, H72, H77, E62, O52.<\/span><\/i><\/td>\nDOI<\/b>: https:\/\/doi.org\/10.31521\/modecon.V54(2025)-21<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[\/vc_column_text][vc_column_text]Prots Natalia, <\/b>PhD in Economics, Associate Professor, Associate Professor of the Department of Finance, Lesya Ukrainka Volyn National University, Lutsk, Ukraine<\/span><\/p>\n

ORCID:<\/strong> 0000-0003-3897-6482<\/span><\/a>
\ne-mail: <\/strong>Vyshnevska.Nataliya@vnu.edu.ua<\/span><\/a><\/p>\n

Kosteniuk Taras, <\/b>Postgraduate student, (4th year) in specialty 072 \u201cFinance, Banking and Insurance\u201d, Lesya Ukrainka Volyn National University, Lutsk, Ukraine<\/span><\/p>\n

ORCID:<\/strong> 0009-0007-7781-6410<\/span><\/a>
\ne-mail: <\/strong>Kosteniuk.Taras@vnu.edu.ua<\/span><\/a><\/p>\n

 <\/p>\n

Foreign Experience of Financial Equalization of Local Budgets and European Thinking<\/b><\/p>\n

Abstract. Introduction<\/i><\/b>. <\/span><\/i>This article examines the foreign experience of interbudgetary regulation and its significance for Ukraine under martial law and in challenging economic circumstances. It analyses the essence of vertical and horizontal financial equalisation and their role in ensuring social protection and improving citizens’ quality of life. The paper summarises scientific approaches to defining financial equalisation and studies foreign models of local budget management, focusing particularly on Germany, Spain, Sweden and France. It outlines the modern challenges to the functioning of the budget mechanism during martial law and the post-war reconstruction period, when the burden on local budgets increases and new tools for the redistribution of financial resources are required. Particular attention is paid to fiscal decentralisation, local taxes and fees, and transfer and subvention systems as instruments of budget regulation. The key instruments of regulation are determined to be tax equalisation, interregional transfers, state subsidies, and targeted subventions.<\/span><\/i><\/p>\n

Purpose<\/i><\/b>. The article aims to provide a scientific justification for implementing the European experience of financial equalisation in Ukraine, particularly in conditions of war involving infrastructure destruction and the low financial capacity of local communities, as an important element of budgetary regulation.<\/span><\/i><\/p>\n

Results<\/i><\/b>. It has been established that the primary objective of inter-budgetary regulation in European countries is to reduce regional disparities and guarantee citizens’ equal access to essential public services. This study shows that the European approach to inter-budgetary regulation highlights the importance of balancing regional autonomy with centralised support. Effective regulation contributes to economic stability and strengthens European values of solidarity and unity. However, in the context of martial law and the future reconstruction of Ukraine, further research is needed into how these approaches can be adapted to the current Ukrainian reality.<\/span><\/i><\/p>\n

Conclusions<\/i><\/b>. It was concluded that it is feasible to adapt the best practices of foreign experience into the domestic system of budgetary relations in order to strengthen the financial capacity of territorial communities and further develop decentralisation processes in Ukraine.<\/span><\/i><\/p>\n

Keywords<\/b>: financial equalization; inter-budgetary relations; local budgets; inter-budgetary regulation; fiscal decentralization; financial capacity of communities; transfers; taxes; budgetary policy; financial mechanism; fiscal factors; european integration.<\/span><\/i><\/p>\n

References<\/b>:<\/strong><\/p>\n

    \n
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    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Received: <\/strong>29 October 2025<\/span><\/p>\n

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    Prots N., Kosteniuk T. (2025). Foreign Experience of Financial Equalization of Local Budgets and European Thinking. Modern Economics, 54(2025), 163-171. DOI: https:\/\/doi.org\/10.31521\/modecon.V54(2025)-21.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1657628632157{margin-top: 10px !important;}”]<< \u041f\u043e\u0432\u0435\u0440\u043d\u0443\u0442\u0438\u0441\u044f \u0434\u043e \u0437\u043c\u0456\u0441\u0442\u0443<\/a>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/section>","protected":false},"excerpt":{"rendered":"

    [vc_row][vc_column][vc_column_text] JEL Classification: H71, H72, H77, E62, O52. DOI: https:\/\/doi.org\/10.31521\/modecon.V54(2025)-21 [\/vc_column_text][vc_column_text]Prots Natalia, PhD in Economics, Associate Professor, Associate Professor of the Department of Finance, Lesya Ukrainka Volyn National University, Lutsk, Ukraine ORCID: 0000-0003-3897-6482 e-mail: Vyshnevska.Nataliya@vnu.edu.ua Kosteniuk Taras, Postgraduate student, (4th year) in specialty 072 \u201cFinance, Banking and Insurance\u201d, Lesya Ukrainka Volyn National University, Lutsk, Ukraine
    Read more<\/a><\/p>\n","protected":false},"author":10,"featured_media":13475,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[245],"tags":[247],"class_list":["post-21384","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-54-2025","tag-54-2025"],"_links":{"self":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/21384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/comments?post=21384"}],"version-history":[{"count":2,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/21384\/revisions"}],"predecessor-version":[{"id":21388,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/21384\/revisions\/21388"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/media\/13475"}],"wp:attachment":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/media?parent=21384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/categories?post=21384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/tags?post=21384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}