METHODOLOGY FOR ASSESSING THE EFFECTIVENESS OF FINANCIAL DECENTRALIZATION

Abstract

The article is devoted to the development of methodological approaches to assessing the effectiveness of fiscal decentralization in Ukraine in the context of ongoing administrative and financial reforms. The purpose of the study is to substantiate a comprehensive system of indicators and tools that can be used to evaluate the financial capacity of territorial communities and the effectiveness of local budget policy. The research methodology includes a combination of quantitative and qualitative approaches. Quantitative methods involve the analysis of the dynamics of local budget revenues and expenditures, the calculation of key financial indicators such as the level of fiscal autonomy, the ratio of revenues to expenditures, and the index of budgetary dependence. Qualitative methods include expert evaluations, sociological surveys, and assessments of management practices and transparency at the local level. Special attention is paid to the challenges faced by local governments in implementing fiscal decentralization, including the uneven distribution of financial resources, the shortage of qualified personnel, and the lack of integration between financial and strategic planning. Based on the analysis of open data and the experience of Ukrainian communities, the article presents examples of successful application of the proposed methods in assessing financial capacity and autonomy. The results of the study indicate the need to improve the existing system of evaluation by introducing a unified methodology based on digital tools and open data. Such an approach would enhance the transparency of financial processes and improve the quality of management decisions. The practical significance of the research lies in the possibility of using the developed system by local governments, policy makers, and analysts for continuous monitoring and strategic planning. The proposed tools can also be adapted to other countries undergoing decentralization processes, especially in conditions of limited budgetary resources or crisis situations. The authors suggest that further research should focus on evaluating the impact of decentralization on different types of communities (urban, rural, amalgamated), the resilience of local budgets under martial law, and the role of citizen participation in shaping effective and accountable fiscal policy at the local level.