Assessment of structural changes in local budgets under financial decentralization

Abstract

In the current conditions of reforming the public finance system, the problem of assessing structural changes in local budgets caused by the introduction of financial decentralization is of particular relevance. The redistribution of tax powers, the change in the role of transfers, and the growth of financial autonomy of territorial communities have led not only to quantitative but also to qualitative transformations of the budget system at the local level. At the same time, scientific research is dominated by approaches that are limited to the analysis of the specific weights of individual items of income or expenditure, which does not allow to fully reveal the depth and intensity of structural shifts. The aim of the article is to assess structural changes in the revenues of local budgets of Ukraine under financial decentralization based on the use of a set of quantitative indicators of structural shifts. The study used official statistical data from the Ministry of Finance of Ukraine and the state web portal «Open Budget» for 2012–2024. To assess the structural dynamics of local budget revenues, linear and quadratic coefficients of absolute structural shifts, quadratic coefficient of relative structural shifts and Ryabtsev's integral index were used. The results obtained showed the presence of both periods of minor changes in the structure of revenues and phases of increased structural shifts, which occurred during the years of active implementation of the financial decentralization reform and periods of external shocks, in particular the COVID-19 pandemic and the beginning of a full-scale war. It was concluded that the use of integral and complex indicators is more informative compared to the traditional analysis of specific weights, since it allows us to quantitatively assess the intensity and direction of structural changes. The results obtained confirm the measurable impact of financial decentralization on the structure of local budget revenues and form an analytical basis for further interregional research.