Are regional public budgets associated with renewable energy development? Evidence from Ukraine

The main objective of this research is to study the role and impact of fiscal decentralization on the macroeconomic stability of the country. The paper analyzes and systematizes approaches to the definition of ‘macroeconomic stability’ concept. The key factors that impact macroeconomic stability are identified. In the framework of this research, the authors identify fiscal decentralization as one of the factors affecting macroeconomic stability. To determine the strength and statistical significance of the above mentioned relationship, the authors suggest presenting macroeconomic stability as a functional dependency between macroeconomic stability and the level of fiscal decentralization, which is described by the following variables: the growth rate of money supply, investment and openness of the economy, fiscal decentralization. In this case, it is suggested to determine the level of fiscal decentralization in three directions: expenditure decentralization, revenue decentralization and expenditure decentralization simultaneously.

An essential determinant of the economic growth of regions and amalgamated hromada is budgetary security, the weakening of which causes the strengthening of financial imbalances of territories and the emergence of budget risks and threats in different time lags. The paper aims to assess budgetary security of regions and amalgamated hromada in Ukraine in an unstable economy. The assessment of budgetary security and risks of areas and amalgamated hromada is carried out based on a multidimensional statistical analysis of budget indicators, calculation of the aggregate indicator of budget risks, and the level of budgetary security by a multiplicative method. The study sample included the regions of Ukraine and 22 amalgamated hromada in terms of cities of regional significance, urban, township, and rural territorial assemblies, which are represented by different areas in Ukraine. According to the assessment, Poltava, Kyiv, Zaporizhzhia, Dnipropetrovsk, and Mykolaiv oblasts are characterized by a low level of budget risks, which indicates high budget stability. On the other hand, the strengthening of budget imbalances, deterioration of the strength of local budgets, in particular in 2019–2020 in urban amalgamated hromada (Druzhbivska and Malovyskivska (6-8 points)); in village areas (Malynivska (5 points), Steblivska (7-7 points)); in rural amalgamated hromada (Chmyrivska (8-7 points)). The study results can serve as an analytical basis in the practice of local governments in the development and justification of regional and local budget policies, the nature of inter-budgetary relations, the formation of regional development strategies, etc.

Acknowledgments
The study has been conducted within the framework of Applied Research “Financial determinants of the provision of economic growth in the regions and Amalgamated hromada based on the behavioral economy” with the support of the National Research Foundation of Ukraine (M. Dolishniy Institute of Regional Research of National Academy of Sciences of Ukraine, the Grant Reg. No. 2020.02/0215, 2020–2022).

Nowadays in Ukrainian realities decentralization, as a process of expanding and strengthening the rights and powers of administrative-territorial units, contributes to the development of financial innovations, the accessibility of public goods, and improvements in the quality of life of the population.
The aim of the article goal is developing the recommendations for improving the financial support of the regions by introducing new tools of influence of communities and local self-governments on the economic growth of territories.
Using the methods of factor analysis, regression analysis, and significant components, the article determines the impact of regional economic development on the revenues of local budgets. The empirical findings show the close correlation between budgetary decentralization and industrial capabilities of the regions. A cluster analysis was carried out to identify the asymmetries of regional development in terms of financial capacity. It enabled to distinguish homogeneous groups of areas according to the indicators of their economic development. On this basis the authors substantiated the necessity of entrepreneurial activity stimulating, increasing the number of companies, and promoting a continuous flow of goods (works, services) from the producer to the consumer in different regions of Ukraine.