FISCAL DECENTRALIZATION AS A FACTOR IN OVERCOMING SOCIO-ECONOMIC IMBALANCES IN THE POST-WAR PERIOD
Abstract
The article is devoted to the theoretical justification and practical analysis of fiscal decentralization as an effective tool for overcoming socio-economic imbalances in the context of Ukraine’s post-war recovery. The issue of fiscal decentralization has gained particular significance due to the transformational processes caused by the war and the urgent need for reconstruction. Modern academic literature emphasizes the role of decentralized financial policy in strengthening the resilience of territorial communities and balancing regional development. The article examines the dynamics of employment, personal income tax (PIT), and local budgets in the period 2021–2024. It is determined that fiscal decentralization enhances the role of local communities in stimulating economic activity while requiring mechanisms of horizontal equalization. Special attention is given to the need for state support of regions with low fiscal capacity in order to prevent the deepening of regional inequality. As a result of the armed conflict in Ukraine, socio-economic imbalances have significantly intensified. The country has faced a large influx of internally displaced persons, many of whom are civilians from the temporarily occupied territories. Their adaptation to new living conditions, social integration, and access to housing and employment have become pressing challenges for both local and central authorities. Additionally, the rise in unemployment and the outflow of population from crisis-affected regions have further complicated the country's economic recovery. The issue of fiscal decentralization in the context of overcoming socio-economic imbalances has gained particular relevance amid the transformational processes caused by the war and the urgent need for national reconstruction. This has led to an important scientific and practical task: to examine the extent to which fiscal decentralization can serve as a mechanism for addressing the deepened socio-economic disparities resulting from the war. The relevance of this issue is driven by the need to justify strategic approaches to shaping an effective financial policy during the post-war transformation of the Ukrainian state. The purpose of this article is to provide a theoretical justification and practical analysis of fiscal decentralization as an effective instrument for overcoming socio-economic imbalances in the context of Ukraine’s post-war recovery, as well as to identify directions for its improvement to ensure sustainable regional development.
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