Money, finances and credit

Financial capacity of local budget as a basis for sustainable functioning of a territory

Economic Annals-XXI

Economic Annals-ХХI: Volume 147, Issue 1-2(1), Pages: 78-81

Citation information:
Liuta, O., Pihul, N., & Kubakh, T. (2015). Financial capacity of local budget as a basis for sustainable functioning of a territory. Economic Annals-XXI, 1-2(1), 78-81. https://ea21journal.world/index.php/ea-v147-19/

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Olha Liuta
PhD (Economics),
Associate Professor,
Ukrainian Academy of Banking of the National Bank of Ukraine
57 Petropavlivska Str., Sumy, 40030, Ukraine
olga_lutaya@ukr.net

Nataliya Pihul
PhD (Economics),
Associate Professor,
Ukrainian Academy of Banking of the National Bank of Ukraine
57 Petropavlivska Str., Sumy, 40030, Ukraine
ngpigul@gmail.com

Tetiana Kubakh
PhD (Economics),
Associate Professor,
Ukrainian Academy of Banking of the National Bank of Ukraine
57 Petropavlivska Str.,Sumy, 40030, Ukraine
kubakh79@gmail.com

Financial capacity of local budget as a basis for sustainable functioning of a territory

Abstract. The level of local budgets’ financial capacity plays an important role in sustainable socio-economic development providing to the region. Financial capacity of a local budget is capability of the local governmental bodies to exercise local budget expenditures in a timely and proper way, in full conformity with their own direct authorities and delegated authorities, in order to achieve tactical and strategic objectives of social and economic development in a region through accumulating sufficient amount of financial resources. 

Financial capacity of the local budget consists of three components: financial potential, financial autonomy and financial sufficiency. In the article, the authors have proposed a methodology for financial capacity of the local budget evaluating by calculating the integral index, based at coefficients usage. The proposed approach is of practical importance. It allows making an adequate analysis of the local budgets’ financial capacity in Ukraine, timely identify the problems, determine the causes of their occurrence, reserves and ways to improve efficiency of financial relations at the regional level.

Keywords: Financial Ability; Municipal Budget; Financial Autonomy; Financial Potential

JEL Classіfіcatіon: H70; H72; R51

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Received 18.12.2014

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