Year: 2025
Type: article
Abstract: The article presents a scientifically grounded systemic model of the financial mechanism for the development of territorial communities, tailored to the complex realities of decentralization and post-war recovery in Ukraine. Against the backdrop of increased fiscal decentralization, institutional reforms, and socio-economic instability, local governments face a wide range of challenges that hinder effective public financial management. These include the persistence of centralized budget practices, significant disparities in regional economic capacity, limited access to alternative financial resources, and underdeveloped institutional frameworks within local self-government bodies. To address these challenges, the author proposes a comprehensive financial management model that integrates five interdependent subsystems: institutional, resource, instrumental, managerial, and performance-based. Each subsystem is elaborated in terms of its internal structure, functions, and operational logic. The institutional subsystem focuses on the development of a robust legal and regulatory framework and competent administrative structures. The resource subsystem emphasizes revenue diversification, including local taxes, transfers, grants, and borrowings. The instrumental subsystem outlines tools for attracting financial resources, such as municipal bonds and public-private partnerships. The managerial subsystem supports modern budgeting practices, strategic planning, and financial forecasting, while the performance-based subsystem provides indicators for evaluating efficiency, transparency, and development outcomes. The article argues that the practical implementation of this model will enhance the financial resilience and autonomy of territorial communities, promote long-term regional development, attract investment, and improve the delivery of public services. It also identifies future research directions, such as the creation of evaluation methodologies for subsystem effectiveness, the incorporation of digital technologies into fiscal governance, and the expansion of intermunicipal financial cooperation as a tool for strengthening fiscal sustainability.
Source: Economic scope
Author: Vitalii Soroka
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4412385125