The Formation of Local Budgets on the Basis of Decentralization

It is determined that the process of formation of local budgets is fundamentally improved and acquires new traits under conditions of enhancing fiscal decentralization. The experience of the countries with market and transformational economy as to implementing of decentralization processes in the financial sphere is analyzed, subject to existence of objective institutional barriers and restrictions. The basic principles of the fiscal decentralization in Ukraine are delineated, taking into consideration the principles of unity and balance, independence, completeness and validity, efficiency and effectiveness, subsidiarity, target use of resources, fairness and impartiality, publicity and transparency. The theoretical and methodological principles of assessing the level of fiscal decentralization at both the macro- and the micro-levels have been generalized and improved. The role of local government bodies in the implementation of financial policy at the level of administrative-territorial units is outlined. The basic regularities of decentralization are formulated. The features of implementation of tax policy at the regional level are defined. The importance of public initiatives and control in the formation of budget policy in the field of expenditure has been identified. The main endogenous factors influencing the process of formation of local budgets are characterized, taking account of the strategic goal of ensuring their constant economic growth