Amalgamation and local finance : a case study of Ukraine

Wright, Glen (author), Slukhai, Sergii (author), Yakymchuk, Bohdan (author)

Purpose: The article aims to measure the impact of the voluntary amalgamation approach applied in Ukraine in the course of the decentralization reforms undertaken over a period of five years, and assess how much these reforms have been successful in improving the local government fiscal situation. Ukraine began a long-delayed decentralization process in 2015 through amalgamation based on a voluntary approach, with an emphasis on improving the fiscal resources of the amalgamated units. The decentralization reform was based on three pillars: (1) voluntary amalgamation of the territorial units, (2) enhanced financial resources through own source revenues and infrastructure grants, and (3) utilization of inter-municipal cooperation to support improved service delivery. Methodology: A time series of fiscal data from amalgamated territorial communities in selected regions of Ukraine have been analysed to measure the impact of the amalgamation policy on the amalgamated territorial units. Findings: The fiscal improvements anticipated by the amalgamated territorial units have not been demonstrated by the statistical data analysis and no significant improvement in local government finances appears to have been realized through the application of a voluntary merging approach. There have been significant regional and urban/rural variations based on the population segments and access to financial resources. Academic contribution to the field: While there has been considerable research on the impact of merging or amalgamating local governments, there has been very little, if any, on the voluntary approach to amalgamation. The study seeks to address this problem and present evidence of the advantage of utilizing a voluntary over a mandatory approach to amalgamation. Significance: The study provides a unique opportunity to measure the impact of amalgamation process in Ukraine over a five-year period based on the voluntary approach to amalgamation and determine how much this approach and the accompanying policies have been successful in improving the local government fiscal situation.

• Language: English
• Keywords: amalgamated territorial communities, fiscal decentralization, voluntary amalgamation, fiscal equalization
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: FU - Faculty of Administration
• Publication status: Published
• Publication version: Version of Record
• Year: 2022
• Number of pages: Str. 147-168, 195-196
• Numbering: Vol. 20, no. 2
• PID: 20.500.12556/RUL-143415
• UDC: 35:336.1:352(477)
• ISSN on article: 2591-2240
• DOI: 10.17573/cepar.2022.2.07
• COBISS.SI-ID: 132442371
• Publication date in RUL: 20.12.2022

Record is a part of a journal

• Title: Central European public administration review
• Publisher: Fakulteta za upravo
• ISSN: 2591-2240
• COBISS.SI-ID: 293849600

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Title: Združevanje in lokalne finance

Abstract

Namen: Namen članka je izmeriti učinek prostovoljnega združevanja, tj. pristopa, ki je bil v Ukrajini uporabljen v petletnem obdobju izvajanja decentralizacije, in oceniti, kako uspešne so bile te reforme pri izboljšanju fiskalnega položaja lokalnih oblasti. Ukrajina je leta 2015 končno zagnala dolgo odlašani proces decentralizacije, ki je potekal kot prostovoljno združevanje s poudarkom na okrepitvi fiskalnih virov združenih enot. Decentralizacija je temeljila na treh stebrih: (1) prostovoljno združevanje teritorialnih enot, (2) krepitev finančnih virov s prihodki iz lastnih virov in subvencijami za infrastrukturo ter (3) medobčinsko sodelovanje za izboljšano izvajanje storitev. Metodologija: Za merjenje vpliva politike združevanja na združene teritorialne enote je bila analizirana časovna vrsta fiskalnih podatkov iz združenih teritorialnih skupnosti v izbranih ukrajinskih regijah. Ugotovitve: Analiza statističnih podatkov ni pokazala fiskalnih izboljšav, ki so jih pričakovale združene teritorialne enote, in zdi se, da uporaba pristopa prostovoljnega združevanja ni privedla do bistvenega izboljšanja financ lokalnih oblasti. Glede na posamezne segmente prebivalstva in dostop do finančnih virov so bile ugotovljene velike razlike med regijami ter med mestom in podeželjem. Akademski prispevek k znanstvenem področju: Medtem ko je bilo opravljenih že precej raziskav o vplivu spojitve ali združevanja lokalnih oblasti, pa so raziskave o prostovoljnem pristopu k združevanju zelo skromne. Namen te raziskave je odpraviti ta manko in dokazati prednosti prostovoljnega združevanje pred obveznim. Pomen: Študija je raziskovalno delo, ki ponuja edinstveno priložnost za merjenje vpliva procesa združevanja v Ukrajini v petletnem obdobju na podlagi prostovoljnega združevanja in za presojo, kako uspešno so bili ta pristop in spremljajoče politike pri izboljšanju fiskalnega položaja lokalnih oblasti.

• Keywords: združene teritorialne skupnosti, fiskalna decentralizacija, prostovoljno združevanje, fiskalno izenačevanje