1. bookVolume 14 (2021): Issue 1 (June 2021)
Journal Details
License
Format
Journal
First Published
03 Aug 2009
Publication timeframe
2 times per year
Languages
English
Copyright
© 2020 Sciendo

Decentralization Policy in Ukraine: How Voluntary Amalgamation, Inter-Municipal Cooperation and Fiscal Incentives Impacted the Local Government System

Published Online: 12 May 2021
Page range: 311 - 343
Journal Details
License
Format
Journal
First Published
03 Aug 2009
Publication timeframe
2 times per year
Languages
English
Copyright
© 2020 Sciendo
Abstract

This paper examines the progress of implementing a comprehensive decentralization program in Ukraine. Ukraine was practically the last country of the former Soviet bloc to undertake a comprehensive decentralization program. The decentralization program was based on three pillars: (1) a reliance on voluntary amalgamation of the local government units, (2) the use of inter-municipal cooperation, and (3) enhanced financial incentives. The authors examine how these policies were implemented as well as the impact on local governments service delivery and fiscal capacity. The analyses are based on available data and the application of statistical tests measuring fiscal resources to the population size and other variables of the local government. The study has revealed some significant flaws in Ukrainian decentralization policy implementation. The voluntary approach eventually had to be abandoned for a mandatory approach. The weak progress in inter-municipal cooperation did not establish improved service delivery across a large number of local government units. The financial incentives with greater sharing of taxes did not provide sufficient additional resources to make the units financially sustainable. Finally, the results of the local government elections held in the amalgamated units did not reveal widespread support for the new units and the decentralization reforms. These issues create significant risks for the final success of the decentralization reform.

Keywords

Bel, Germa and Marianna Sebo. 2019. “Does Inter-Municipal Cooperation Really Reduce Delivery Costs ? An Empirical Evaluation of the Role of Scale Economies, Transaction Costs, and Governance Arrangements.” Urban Affairs Review. doi:10.1177/1078087419839492. Search in Google Scholar

Bird, Richard M., Robert D. Ebel and Christina I. Wallich (eds). 1995. Decentralization of the Socialist State: Intergovernmental Finance in Transition Economies. Washington, D.C.: The World Bank. Search in Google Scholar

Carmeli, Abraham. 2002. “Relationship between Organizational and Structural Characteristics and Local Authority’s Fiscal Health.” Public Administration Quarterly 26(3), 426 – 464. Search in Google Scholar

Centre of Expertise for Local Government Reform of the Council of Europe and Pawel Swianiewicz. 2017. Report on Municipal Amalgamation and Possible Impact on Territorial Reform of Upper Tiers of Government. Strasbourg: Council of Europe. Search in Google Scholar

Charbit, Yves. 2002. “The Platonic City: History and Utopia.” Population (English edition) 57(2), 207 – 235. Search in Google Scholar

Council of Europe. 2019. Reports: Annual National Opinion Polls on Decentralization and Local Self-Government Reform, 4 March 2019. Available at http://www.slg-coe.org.ua/p16423 (last accessed 23 September 2020). Search in Google Scholar

Dzupin, Maria and Oleksiy Kolesnikov. 2019. Inter-Community Cooperation: New Opportunities for Education and Healthcare. Available at http://cooperation.acsa.com.ua/ (last accessed 22 July 2020). Search in Google Scholar

Ebinger, Falk, Sabine Kuhlmann and Joerg Bogumil. 2019. “Territorial Reforms in Europe: Effects on Administrative Performance and Democratic Participation.” Local Government Studies 45(1), 1 – 23. Search in Google Scholar

Gomes, Ricardo Carrero, Solange Alfinito and Pedro Henrique Melo Albuquerque. 2013. “Analyzing Local Government Financial Performance: Evidence from Brazilian Municipalities 2005 – 2008.” Revista de Administracao Contemporanea 17(6), 704 – 719. Search in Google Scholar

Hamaniuk, Olexiy and Maria Palchuk. 2020. “Size Matters: Incomes of Smaller Hromadas (Communities) Increase More Than of Large Ones.” Vox Ukraine, 26 March. Available at https://voxukraine.org/en/size-matters-incomes-of-smaller-hromadas-communities-increase-more-than-of-large-ones/ (last accessed 12 May 2020). Search in Google Scholar

Hulst, Rudie and Andre van Montfort. 2007. Inter-Municipal Cooperation in Europe. Dordrecht: Springer. Search in Google Scholar

Ilko Kucheriv Democratic Initiatives Foundation. 2020. “The Opinion of Citizens about the Decentralization Reform and its Results.” Available at https://dif.org.ua/en/article/the-opinion-of-citizens-about-the-decentralization-reform-and-its-results (last accessed on 12 November 2020). Search in Google Scholar

Jones, Stewart and Richard Walker. 2007. “Explanators of Local Government Distress.” Abacus 43(3), 396 – 418. Search in Google Scholar

Khadzhyradeva, Svitlana, Sergii Slukhai and Anatolii Rachynskyi. 2020. “Public Administration in Ukraine: Adjusting to European Standards.” NISPAcee Journal of Public Administration and Policy 13(1), 81 – 108. doi:10.2478/nispa-2020 – 0004. Search in Google Scholar

Klimovský, Daniel and Paweł Swianiewicz (eds). 2010. Territorial Consolidation Reforms in Europe. Budapest: OSI / LGI. Search in Google Scholar

Levitas, Tony. 2020. On the Legal Classification of Local Government Functions. Technical Report May 2020. Available at https://www.researchgate.net/publication/342009140 (last accessed 27 August 2020). Search in Google Scholar

Levitas, Anthony and Jasmina Djikic. 2017. “Caught Mid-Stream: ‘Decentralization’. Local Government Finance Reforms and the Restructuring of Ukraine’s Public Sector: 2014 – 2016.” SIDA, Support to Decentralization in Ukraine Project, SKL. Search in Google Scholar

Martinez-Vazquez, Jorge and Wayne Thirsk. 2010. Fiscal Decentralization in Ukraine: Accomplishments and Challenges in the Transition. New York: Nova Science Publishers, Inc. Search in Google Scholar

Martinez-Vazquez, Jorge and Andrey Timofeev. 2010. “Decentralization Measures Revisited.” International Studies Program Working Paper 09 – 13 (updated), Andrew Young School of Policy Studies, April 2010. Search in Google Scholar

Newmaier, Simone, Yulia Sybirianska and Viktor Ventsel. 2019. Assessment of the Public Finance Management System of Amalgamated Hromadas. Kyiv: U-LEAD. Search in Google Scholar

Perrin, John. 2017. An Analysis of the Effect of State Aid Transfers on Local Government Expenditures. MPA / MPP Capstone Projects 281. Search in Google Scholar

Proshko, Vadym. 2015. Intermunicipal Cooperation in Ukraine. Council of Europe. Programmatic Cooperation Framework for Armenia, Azerbaijan, Georgia, Republic of Moldova, Ukraine, and Belarus. Search in Google Scholar

Ramsey, Tina Kim. 2013. Measuring and Evaluating the Financial Condition of Local Governments. A Thesis. Department of Public Policy and Administration, California State University, Sacramento. Search in Google Scholar

Rodrigues, Miguel Angelo and Antonio Tavares. 2020. The Effects of Amalgamations on Voter Turnout: Evidence from Sub-Municipal Governments in Portugal Cities. 101.10.1016.2020.102685. Search in Google Scholar

Romanyuk, Olga, Glen Wright, Phillip Rosenberg, Liubomyr Chornii, Kyrylo Rubanovsky and Maxym Boroda. 2010. Advisory Support for Local Budgets Reform in Ukraine. WB Final Report. December 2010. Search in Google Scholar

Slukhai, Sergii. 2002. “Ukrainian Local Governments’ Finance on the Threshold of a New Millennium: Will Interbudgetary Reform Meet Public Needs ?” Public Budgeting and Finance 22(3), 46 – 66. Search in Google Scholar

Sociological Group Rating. 2020. Monitoring of Local Government Elections 2020: Ukraine (16 – 19 October 2020). Kyiv: Rating. Search in Google Scholar

Solodkyy, Sergiy, Tetiana Levoniuk, Viktoria Balasanyan, Maria Dzupyn, Oleksandra Kalashnikova, Yevheniia Kozun, Viktor Bobyrenko and Yuliya Bidenko. 2020. “The Link between Decentralization and EU Integration.” New Europe Center (Ukraine) and Centre for East European and International Studies (ZOIS, Germany). Search in Google Scholar

Soukopová, J., J. Nemec, L. Matějová and M. Struk. 2014. “Municipality Size and Local Public Services: Do Economies of Scale Exist ?” NISPAcee Journal of Public Administration and Policy 7(2), 151 – 171. doi:10.2478/nispa-2014-0007. Search in Google Scholar

Swianiewicz, Pawel (ed.). 2002. Consolidation or Fragmentation: The Size of Local Governments in Central and Eastern Europe. Budapest: OSI / LGI. Search in Google Scholar

Swianiewicz, Pawel. 2010. “If Territorial Fragmentation is a Problem, is Amalgamation a Solution ? An East European Perspective.” Local Government Studies 36(2), 183 – 203. Search in Google Scholar

Swianiewicz, Pawel, Adam Gendzwill and Alfonso Zardi. 2017. Territorial Reforms in Europe: Does Size Matter. Strasbourg: Council of Europe, Partnership for Good Governance. Search in Google Scholar

Tavares, Antonio. 2018. Municipal Amalgamations and Their Effects: A Literature Review. Miscellanes Geographica 22. 10 / 2478 / mgrad-2018 – 2005. Search in Google Scholar

U-LEAD. 2019. Assessment of the Budget Performance of 806 Ahs Ranking for 2019. Available at www.decentralization.gov.ua (last accessed 23 March 2020). Search in Google Scholar

Udovychenko, Volodmyr, Anatoliy Melnychuk, Oleksiy Gnatiuk and Pavlo Ostapenko. 2017. “Decentralization Reform in Ukraine: Assessment of the Chosen Transformational Model.” European Spatial Research and Policy 24(1), 23 – 40. Search in Google Scholar

Ukraine Center for Independent Political Research. 2017. Decentralization in Ukraine: Achievements, Expectations, and Concerns. Kyiv: International Alert. Search in Google Scholar

Umland, Andreas and Valentyna Romanova. 2019. Ukraine’s Decentralization Reforms since 2014: Initial Achievements and Future Challenges. London: Chatham House. Search in Google Scholar

UNDP. 2003. The Power of Decentralization: Ukraine Human Development Report 2003. Kyiv: Publishing House Blitz Print. Search in Google Scholar

USAID. 2020. Self-Help Nation: Ukrainians Are Disappointed in Reforms, But Ready to Support Each Other and Their Communities. Kyiv, Ukraine, 9 October 2020. Available at https://engage.org.ua/eng/self-help-nation-ukrainians-disappointed-in-reforms-but-ready-to-support-each-other-and-their-communities/ (last accessed 20 October 2020). Search in Google Scholar

Wright, Glen. 1995. “Policy Options for Local Government Decision-Making Capacity.” Paper presented at International Scientific-Practical Conference on Problems of Modern City Management, Kiev, 28 – 29 September 1995. Search in Google Scholar

Wright, Glendal. 2017. New Rules for Implementation of Fiscal Decentralization. 3rd International Conference on Public Policy. Available at https://www.ippapublicpolicy.org//file/paper/5936941ee42b3.pdf (last accessed 21 December 2019). Search in Google Scholar

Wright, Glen, Olga Romanyuk, Liubomyr Chornii, Kyrylo Rubanovsky and Maxym Boroda. 2010. World Bank Final Report: Advisory Support for Local Budgets Reform QCBS-2. McLean, VA: Booz, Allen, Hamilton. Search in Google Scholar

Wright, Glen et al. 2003. The Power of Decentralization: Ukraine Human Development Report. Kyiv: UNDP. Search in Google Scholar

Zafra-Gomez, Jose Luis, Antonio Manuel Lopez-Hernandez and Agustin Hernando-Bastida. 2009. “Developing a Model to Measure Financial Condition in Local Government.” American Review of Public Administration 39(4), 425 – 449. Search in Google Scholar

Zubenko, V., A. Kornienko and V. Holynskyy. 2020. Results of Assessment of Public Financial Management Systems in Amalgamated Hromadas. Available at https://decentralization.gov.ua/uploads/library/file/480/10_AHs_assessment_final_report_ENG.pdf (last accessed 21 September 2020). Search in Google Scholar

Дяконенко, Ольга. 2018. “Вплив фінансової децентралізації на розвиток сільських поселень в Україні.” Демографія та соціальна економіка 3(34), 161 – 174. Search in Google Scholar

Жаліло Ярослав et al. 2018. Децентралізація влади: як зберегти успішність в умовах нових викликів. Київ: НІСД. Search in Google Scholar

Жаліло, Ярослав та інші. 2019. Децентралізація влади: порядок денний на середньострокову перспективу. Київ: НІСД. Search in Google Scholar

КМІС. 2019а. Децентралізація та реформа місцевого самоврядування: результати четвертої хвилі соціологічного дослідження. Available at https://www.kiis.com.ua/materials/pr/20191103_decentralisation/decentr_ukr.pdf (last accessed 29 September 2020). Search in Google Scholar

КМІС. 2019b. Децентралізація та реформа місцевого самоврядування: результати соціологічного дослідження серед жителів територіальних громад, які пройшли процес об’єднання у 2015 – 2016 роках. Available at http://www.slg-coe.org.ua/p16423 (last accessed 22 May 2020). Search in Google Scholar

Луніна, Інна Олександрівна. 2000. Державні фінанси України в перехідний період. Харків: Форт. Search in Google Scholar

Луніна, Інна Олександрівна (ed.). 2016. Розвиток бюджетної децентралізації в Україні. Київ: Ін-т екон. та прогнозув. НАН України. Search in Google Scholar

Мельничук, Анатолій. 2020. П’ять років формування нового базового рівня АТУ: успіхи та проблеми реформи в Україні. Київ: Асоціація обєднаних територіальних громад. Search in Google Scholar

Сторонянська, Ірина Зеновіївна. 2018. Децентралізація в Україні та її вплив на соціально-економічний розвиток територій: методичні підходи та результати оцінювання. Львів: ІРД НАНУ. Search in Google Scholar

Plan your remote conference with Sciendo