New Instruments for Implementing the Budget Policy of Development of Territories

• Main Author: Pelekhatyy Andriy O.
• Format: Article
• Language: English
• Published: Research Centre of Industrial Problems of Development of NAS of Ukraine 2020-04-01
• Series: Bìznes Inform
• Subjects: participation budgeting; development of territories; development budget; taxes; civil society; expenses; income
• Online Access: https://www.business-inform.net/export_pdf/business-inform-2020-4_0-pages-377_384.pdf

The article is aimed at developing civil society by involving the inhabitants of territories in the budget process. The main problems that create the preconditions for alienating citizens from involvement in budget policy and slowing down the development of territories are defined. A conceptual model of participation budgeting for the development of territories based on the established principles, methods, instruments and objectives of application is proposed. It is specified that the main objective of the proposed model of participation budgeting is to involve citizens in budget processes and to form a common budget policy for the development of territories by the authorities and residents of these territories. The basic principles of the participation budgeting of the development of territories in the conditions of fiscal decentralization are determined as follows: publicity; compulsoriness; transparency; openness of procedures; inclusion; public participation; self-reliance; unity; complexness; economical effectiveness; targeted orientedness; innovativeness; manageability. It is proved that the process of forming local budgets on a participation basis involves: setting priorities for local expenditures by the residents of territories; choosing representatives of local communities to participate in the budget process; holding local and regional meetings to discuss and vote for priority expenses, which ultimately leads to the implementation of ideas that influence the quality of public services. The main objectives of the introduction of participation budgeting of development of territories are specified as follows: redistribution of financial resources; formation of a new type of relationship between administrative bodies and citizens; building up social connections and changing social interests; formation of an economic culture in the issues of formation and execution of budget; encouraging public activism. A mechanism for participation budgeting of the development of territories at the local and regional levels is developed. The sources of filling participation budgets and the conditions for selecting the projects that will be implemented at the expense of local budgets are identified. The basic conditions of participation budgeting at the local and regional levels are formed: efficient allocation of expenditures; the process of formation of budgets must be ongoing; existence of a development budget; ensuring the direct participation of community members in the formation of budget, direct voting for the implementation of a particular expenditure item. The positive effects of introduction of participation budget at the community and regional levels are generalized. Prospects for further research in this direction are the developments of regulatory legislation at the national level for the leveled conditions of participation budgeting in all the territories of the State.