Assessing the State and Modeling of Prospects for the Development of the Financial Capacity of Territorial Communities

Abstract

The aim of the article is to assess the state of financial capacity of territorial communities of the Zhytomyr region and to model the prospects for their development, taking into account the established trends. It is substantiated that in order to achieve the effective functioning and development of territorial communities, all efforts should be aimed at the development of internal potential, the optimal use of mechanisms for the formation of the revenue side of local budgets and the rational use of the formed financial resources. It is found that the execution of local budgets of territorial communities of the Zhytomyr region in terms of key indicators indicates an unstable situation that characterizes the average trends in Ukraine, which is explained by the high concentration of production and service enterprises in the central regions of Ukraine (including in the Zhytomyr region), whose tax payments provide the lion’s share of all revenues to local budgets. It is identified that within the boundaries of the Zhytomyr region, communities with a population of up to 10 thousand people demonstrate the best results of economic management. In particular, it is found that the communities comprising from 5 to 10 thousand persons have the highest variability of the results obtained, which can be explained by their high flexibility and dependence on the quality of management. It is proved that the least effective and most vulnerable were large communities with a population of more than 15 thousand people. According to all of the above indicators, they were worse than the regional average, and there was not a single hromada with exemplary results among them. The main criteria for the success of territorial communities are allocated and substantiated, in particular: the optimal number of communities is up to 10 thousand people; effective financial provision, stability and sufficiency of resources; qualified specialists in self-government bodies; high-quality control over the activities of self-government bodies; activity and initiative of the community