Principles of financial support for the development of territorial communities in Ukraine

Problem setting. Formation of effective local self-government, which would be in line with the basic principles of the European Charter of Local Self-Government, is one of the most important and, at the same time, complex issues of Ukraine’s development as a democratic state. It is well known that the key element of local self-government is territorial communities which efficiency influences the development of the country. Without urgent reform of local self-government and, in particular, of territorial communities, decentralization processes are impossible, as well as it is not possible to overcome negative processes in the socio-economic and cultural development of territorial communities. At present, the financial support of territorial communities is crucial to ensure their capacity to work.

Recent research and publications analysis. Leading scholars, such as O. Bobrovska, Yu. Molodozhen, O. Olshanskyi, Ye. Ostrom, L. Sukharska, O. Krainyk, and others have researched into the issue of financial support for the development of territorial communities in Ukraine.

Highlighting previously unsettled parts of the general problem. Today it is urgent to study the basic principles of financial support for the development of territorial communities in Ukraine, which served as a motive for choosing the topic of this scientific article.

The purpose of the article is to explore the basic principles of financial support for the development of territorial communities in Ukraine.

Paper main body. The development of territorial communities is impossible without adequate resources, above all financial resources. At the same time, local self-government bodies of most territorial communities, especially small ones, do not have the amount of financial resources that would correspond to the functions stipulated by the legislation, which impedes the full implementation of the European Charter of Local Self-Government, the Law of Ukraine “On Local Self-Government in Ukraine” and concepts of sustainable development of territories.

Financial support for the development of territorial communities is the provision of financial capacity through the involvement of tools, levers and means of influencing the financial status of the territorial community for the effective functioning of all spheres of its life.

Based on the principles set out in the Budget Code of Ukraine, the European Charter on Local Self-Government and other provisions of the current legal framework, as well as scientific sources, the following principles of effective financial support for the development of territorial communities are formulated: unity of the system of financial support for the development of territorial communities; publicity and openness in the process of formation and functioning of the system of financial support for the development of territorial communities; reliability of data on available financial resources of the territorial community; efficient, economical and targeted use of financial resources; and constructive interaction of the owners of financial resources that affect the development of the territorial community.

There are additional principles of financial support for the development of territorial communities in Ukraine, including: objectivity, goal setting, effectiveness, efficiency, priority, competence, complexity, continuity, transparency and situation orientation.

Conclusions of the research and prospects for further studies. The analysis of the basic principles of financial support of local self-government shows that the processes of budgetary decentralization, which are taking place in Ukraine today, generally contribute to the formation of efficient territorial communities. The unification of territorial communities, which aims to improve their financial situation, is also positive in this context. The basic principles of financial support for the development of territorial communities in Ukraine are: the principle of unity of the system of financial support for the development of territorial communities; the principle of publicity and openness in the process of forming and functioning of the system of financial support for the development of territorial communities; the principle of reliability of data on available financial resources of the territorial community; the principle of efficient, economical and targeted use of financial resources; the principle of constructive interaction of the owners of financial resources that affect the development of the territorial community. Also in the context of this article, additional principles of financial support for the development of territorial communities in Ukraine are highlighted, including: objectivity, goal setting, effectiveness, efficiency, priority, competence, complexity, continuity, transparency and situation orientation.