Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
Esta publicación cientíca en formato digital es continuidad de la revista impresa
ISSN-Versión Impresa 0798-1406 / ISSN-Versión on line 2542-3185Depósito legal pp
197402ZU34
ppi 201502ZU4645
Vol.40 N° 73
Julio
Diciembre
2022
Recibido el 14/03/2022 Aceptado el 21/05/2022
ISSN 0798- 1406 ~ De pó si to le gal pp 198502ZU132
Cues tio nes Po lí ti cas
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Vol. 40, Nº 73 (2022), 128-150
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Fiscal decentralization practices in
developing countries
DOI: https://doi.org/10.46398/cuestpol.4073.06
Vitaliy Oluyko *
Igor Samsin **
Olha Stohova ***
Tatiana Filipenko ****
Anastasiia Filipenko *****
Abstract
The objective of the article was to identify and describe the
current state of scal decentralization in Ukraine, Armenia
and Georgia and the problems and achievements of territorial
communities. Observation and comparative analysis were
the main tools used. The study showed that eective scal
decentralization of territorial communities requires the
implementation of the relevant experience of developing countries
that have achieved signicant results. Fiscal decentralization, the transfer
of taxes and spending powers to lower levels of government has become
an important strategy for modern governance in developing countries.
Fiscal decentralization is facilitated by a combination of citizens’ struggle to
actively participate in the management process and dissatisfaction with the
outcomes of the centrally planned economy. It is concluded that adequate
decentralization strengthens the organs of local self-government and forces
states to be more accountable to their citizens. In this regard, the adequacy
and prospects of Sweden’s scal decentralization approach were also noted
as a model worthy of study.
Keywords: decentralization; scal administration; distribution of
competencies; scal potential; decentralization Index.
* Doctor of Science in Public Administration, Professor at the Department of Law, Khmelnytsky
Cooperative Trade and Economic Institute, 29000, Khmelnytsky, Ukraine. ORCID ID: https://orcid.
org/0000-0002-0038-8557
** Doctor of Law Sciences, Professor at the Department of Constitutional, Administrative and Financial
Law, Leonid Yuzkov Khmelnytskyi University of Management and Law, 29000, Khmelnytsky, Ukraine.
ORCID ID: https://orcid.org/0000-0002-5901-9115
*** PhD of Political Sciences, Associate Professor at the Department of Fundamental Jurisprudence and
Constitutional Law, Academic and Research Institute of Law, Sumy State University, 40007, Sumy,
Ukraine. ORCID ID: https://orcid.org/0000-0001-7010-556X
**** Doctor of Science in Public Administration, Professor at the Department of Public Management and
Administration, Educational and Scientic Institute of Management, Mariupol State University,
03037, Kyiv, Ukraine. ORCID ID: https://orcid.org/0000-0001-9870-0889
***** PhD of Law Sciences, Associate Professor at the Department of Public and Legal Disciplines, Faculty
of Economics and Law, Mariupol State University, 03037, Kyiv, Ukraine. ORCID ID: https:// orcid.
org/0000-0002-9628-7426
129
CUESTIONES POLÍTICAS
Vol. 40 Nº 73 (2022): 128-150
Prácticas de descentralización scal en
los países en desarrollo
Resumen
El objetivo del artículo fue identicar y describir el estado actual de la
descentralización scal en Ucrania, Armenia y Georgia y los problemas
y logros de las comunidades territoriales. La observación y el análisis
comparativo fueron las principales herramientas utilizadas. El estudio
mostró que la descentralización scal efectiva de las comunidades
territoriales requiere la implementación de la experiencia relevante de
los países en desarrollo que han logrado resultados signicativos. La
descentralización scal, la transferencia de impuestos y facultades de gasto
a los niveles inferiores de gobierno se ha convertido en una estrategia
importante para la gobernanza moderna en los países en desarrollo. La
descentralización scal se ve facilitada por una combinación de la lucha
de los ciudadanos por participar activamente en el proceso de gestión y la
insatisfacción con los resultados de la economía centralmente planicada.
Se concluye que una descentralización adecuada fortalece los órganos de
autogobierno local y obliga a los estados a ser más responsables ante sus
ciudadanos. En este sentido, como modelo digno de estudio se señaló
además la idoneidad y las perspectivas del enfoque de descentralización
scal de Suecia.
Palabras clave: descentralización; administración scal; distribución
de competencias; potencial scal; índice de
Descentralización
Introduction
The long-term economic impact of the COVID-19 pandemic has
disrupted traditional nancial ows in many countries. Ali et al. (2022)
state that this trend indicated an urgent need to intensify the mobilization
of domestic resources and improve the national tax administration.
Strengthening and using the full potential of domestic taxation is one of the
most important sources of development nancing and should therefore be
a policy priority for modern governments. The above transformations are
especially relevant in developing countries.
Many developing countries around the world are transferring
responsibility to lower levels of government, as decentralization is
considered vitally important for achieving sustainable economic growth
and development. Teremetskyi et al. (2021) indicate that the priority goal
in this context is to promote bottom-up regional development by giving
130
Vitaliy Oluyko, Igor Samsin, Olha Stohova, Tatiana Filipenko y Anastasiia Filipenko
Fiscal decentralization practices in developing countries
subnational governments more freedom in identifying programmes that
match the public interest, as well as local and regional development goals.
Digdowiseiso (2022) maintains that dierent institutional conditions for
scal decentralization can signicantly contribute to growth in developing
countries. Dierent types of scal authorities have a signicant impact on
income distribution and ethnic inequality. As Digdowiseiso (2022) writes,
it depends on the level of institutions and defence spending by certain
developing countries.
In recent decades, the introduction of decentralization systems in many
developing countries, especially in Ukraine, Armenia and Georgia, has
been largely motivated by policy features and cooperation or integration
into the EU. Kohut and Kovacs-Rump (2021) emphasize that more ecient
mobilization of domestic resources and eective scal administration
systems through scal decentralization reforms can oer a way to
strengthening public budgets and increasing the role of taxation as a source
of nancing for eective development.
Fiscal decentralization involves the distribution of taxation and
spending powers between the central government and local governments.
In other words, scal decentralization gives local self-government bodies
considerable autonomy in terms of revenues and expenditures, including
the power to collect taxes and fees. This can increase the scal space of
local self-government bodies and improve service delivery as well as the
well-being of the population. A broader denition includes the nancial
perspective, where not just the right to collect taxes, but economic resources
allocated to the regional level are decentralized. Countries need to meet
several key institutional preconditions for scal decentralization to be
eective. Obeng (2021) attributes the following preconditions there:
1) a stable political environment;
2) eective autonomous subnational governments;
3) institutional capacity at regional/state and local levels of government;
4) government accountability;
5) eective democratic electoral infrastructure at all levels of government;
6) the ability to increase income at the local level to the appropriate level.
The geographical proximity of local self-government bodies to their
electors, direct beneciaries of public services, makes local self-government
bodies to allocate scal resources eciently.
It is important to conduct a qualitative legal analysis of real scal
decentralization reforms in a situation where economic theory proposes
competing hypotheses. At the same time, any empirical analysis faces