S. Slukhai, Doctor of Sciences, Professor Taras Shevchenko National University of Kyiv, Kyiv UKRAINIAN FISCAL EQUALIZATION: DOES IT NEED AN IMPROVEMENT?

The article states that existing economic and social differences between territories in Ukraine call for use of fiscal equalization instruments. The study shows that implementation of formula-based fiscal equalization has led to a virtually full equalization of differentials in subnational total public revenues and expenditures on the regional level. Findings presented give reasons for reviewing a current fiscal equalization procedure with regard to incorporating into equalization grant allocation formula fiscal incentives for subnational governments.

Keywords: fiscal equalization, intergovernmental transfers, public finance.

DOI: http://dx.doi.org/10.17721/1728-2667.2015/166-1/5

References

1. Bergvall, D., Charbit, C., Kraan, D.-J., and Merk, O. 2006. Intergovernmental Transfers and Decentralized Public Spending. OECD Journal on Budgeting, 5, pp. 111-158.
2. Bird, R.M., Ebel, D.R., and Wallich, Ch. 1995. Decentralization of the Socialist State: Intergovernmental Finance in Transition Economies. Washington, D. C., The World Bank.
3. Bird, R., and Wallace, S. 2001. Fiscal Decentralization: the Provincial-Local Dimensions. Public Finance in Developing and Transition Countries: A Conference in Honor of Richard Bird Conference Papers International Studies Program, Andrew Young School of Policy Studies, Georgia State University.
4. Buchanan, J. 1950. Federalism and Fiscal Equity. American Economic Review, 40, pp. 583-599.
5. Kim, L., Lotz, J., and Blöchliger, H. 2013. Measuring Fiscal Decentralization: Concepts and Policies. Paris, OECD Publishing.
6. Kuzmenko, S., Voronyuk, V., and Plastun, O. 2012. Development of Intergovernmental Fiscal Relations Based on Assessment of the Regional Fiscal Capacity. Ekonomist, 5, pp. 16-20 in Ukrainian.
7. Lunina, I. 2009. Options for Intergovernmental Fiscal Relations Reform in Ukraine. Ekonomika, 85, pp. 19-28. 8. Lunina, I. 2006. Public Finance and Reforming of Intergovernmental Fiscal Relations. Kyiv: Naukova Dumka in Ukrainian.
9. Martinez-Vasquez, J., and Boex, J. 2001. Russia’s Transition to a New Federalism. WDI Learning Resources Series. Washington, D. C.: World Bank Institute.
10. Martinez-Vasquez, J., and Thirsk, W. R. 2011. Fiscal Decentralization in Ukraine: Accomplishments and Challenges in the Transition. New York: Nova Science Publishers, Inc.
11. Mieszkowski, P., and Musgrave, R.A. 1999. Federalism, Grants, and Fiscal Equalization. National Tax Journal, March, pp. 239-260.
12. Moldovan, O. 2011. Public Finance of Ukraine: Experience and Reforming Prospects. Kyiv: National Insitute of Strategic Research in Ukrainian.
13. Musgrave, R. A. 1961. Approaches to a Fiscal Theory of Political Federalism. In: Public Finances: Needs, Sources, and Utilization. Washington, D.C.: NBER, pp. 97-134.
14. Oakland, W. H. 1994. Fiscal Equalization: An Empty Box? National Tax Journal, 47, pp. 199-209.
15. O’Connell, S., and Wetzel, D. 2003. Systemic Soft Budget Constraints in Ukraine. In: J. Rodden, G.S. Eskeland, and J. Litvack Fiscal Decentralization and the Challenge of Hard Budget Constraint. Cambridge, MS.: The M.I.T. Press, pp. 353-392.
16. Rodden, J., Eskeland, G. S., and Litvack, J. 2003. Fiscal Decentralization and the Challenge of Hard Budget Constraint. Cambridge, MS., The MIT Press.
17. Shankar, R., and Shah, A. 2003. Bridging the Economic Divide Within Countries: A Scorecard on the Performance of Regional Policies in Reducing Regional Income Disparities. World Development, 31, pp. 1421–1441.
18. Shyshko, O. V. 2009. Improving the System of Fiscal Equalization in Ukraine. A Dissertation. Kyiv in Ukrainian.
19. Slukhai, S. 2013 Intergovernmental Transfers: Theory and Practice. Kyiv, AgrarMedia Group in Ukrainian.
20. Söderström, L. 1998. Fiscal Federalism: the Nordic Way. In, J. Rattsø (ed) Fiscal Federalism and State-Local Finance, The Scandinavian Perspective. Cheltenham, UK – Northhampton, MA, Edward Elgar, pp. 3-18.
21. Volokhova, I. S. 2010. Intergovernmental Fiscal Relations in Ukraine: Modern State and Development Prospects, Odesa, Atlant in Ukrainian.

Download

  • pdf 166_5
    File size: 290 kB Downloads: 94