Assessment of the heterogeneity of Ukraine's fiscal space

Abstract

The article is devoted to the study of Ukraine’s fiscal space in the context of its heterogeneity based on the analysis of local budget revenues for the period 2012–2021. The research applies an Exploratory Data Analysis (EDA) approach, which allowed for the identification of statistical outliers and regional anomalies in the fiscal space. Considering the special status of the capital city and in order to obtain a more objective picture of the regional distribution, the revenues of Kyiv’s local budget were excluded from the analysis. In the first part of the study, variation indicators — range, max/min ratio, standard deviation, and coefficient of variation — were used to assess the level of heterogeneity. The results indicate increasing volatility in regional budget revenues, reflecting a process of σ-divergence in the fiscal space. In the second part of the study, the method of regional grouping by the level of local budget revenues was applied. Two groups of oblasts were identified, and coefficients of variation were calculated to assess their internal homogeneity. The analysis revealed the formation of relatively homogeneous groups after 2014 and an increasing gap between average revenue levels, indicating a strengthening divergence and the emergence of a bipolar fiscal space. The study suggests the need to improve interregional equalization mechanisms, promote fiscal decentralization, and conduct further research on the structure of budget revenues.