Volume 13 - Issue 80 / August 2024
DOI: https://doi.org/10.34069/AI/2024.80.08.9
How to Cite:
Orel, Y., Kulinich, O., Korniievskyi, S., Serohina, S., & Gryshko, L. (2024). The impact of decentralization on regional development in Ukraine: challenges and opportunities in the post-war era. Amazonia Investiga, 13(80), 99-108. https://doi.org/10.34069/AI/2024.80.08.9
The impact of decentralization on regional development in Ukraine: challenges and opportunities in the post-war era
Вплив децентралізації на регіональний розвиток в Україні: виклики та можливості у післявоєнну добу
Received: July 3, 2024 Accepted: August 25, 2024
Written by:
Yurii Orel
https://orcid.org/0000-0003-1419-9842
WoS Researcher ID: KZU-7872-2024
PhD., in Public Administration, Associate Professor, Associate Professor of Personnel Management and Entrepreneurship Department, Education and Research Institute "Institute of Public Administration", V.N. Karazin Kharkiv National University, Ukraine.
Oleg Kulinich
https://orcid.org/0000-0002-0870-3136
WoS Researcher ID: AFJ-6050-2022
PhD., in Public Administration, Senior Lecturer of Department of Law, National Security and European Integration, Education and Research Institute "Institute of Public Administration", V.N. Karazin Kharkiv National University, Ukraine.
Serhii Korniievskyi
https://orcid.org/0000-0001-5089-1006
WoS Researcher ID: ABF-1227-2021
PhD., in Public Administration, Associate Professor of the Department of Public Administration and Law, Educational and Scientific Institute “Prydniprovsk State Academy of Construction and Architecture”, Ukrainian State University of Science and Technology, Ukraine.
Svitlana Serohina
https://orcid.org/0000-0002-0107-834X
WoS Researcher ID: AAC-8150-2020
Doctor of Law, Professor, Director, Scientific Research Institute of State Building and Local Government of National Academy of Legal Sciences of Ukraine, Ukraine.
Liliya Gryshko
https://orcid.org/0000-0003-0347-1118
WoS Researcher ID: J-7047-2016
PhD., Senior Researcher, Head of the Municipal Law and Local Self-Government Sector, Scientific Research Institute of State Building and Local Government of National Academy of Legal Sciences of Ukraine, Ukraine.
Abstract
Decentralization, the transfer of power and resources from central to local governments, has been a key outcome of Ukraine's administrative reform. At the same time, many processes were implemented based on the experience of European countries, which emphasised Ukraine's European integration aspirations. This article examines the achievements and challenges of decentralization, particularly in the context of post-war reconstruction. Through content analysis of relevant literature, the study finds that newly formed territorial communities have gained greater financial autonomy and decision-making power, fostering local development initiatives. However, legislative gaps, lack of experience, and coordination challenges with regional authorities persist. The study concludes that aligning with European decentralization models and adapting legislation accordingly are crucial for Ukraine's regional development and successful post-war recovery. It emphasizes the need for further research on the interplay between decentralization and regional socioeconomic progress, especially considering the unique context of ongoing conflict. In conclusion, it is substantiated that adherence to the European vector of development and approximation of domestic legislation to the best European standards is the key to the success of the country as a whole and the formation of strong, economically viable regions.
Keywords: regional policy, local self-government, territorial communities, sustainability, budget planning, administrative and territorial reform.
Анотація
Децентралізація, як передача значних повноважень та бюджетів від державних органів влади – органам місцевого самоврядування, стала одним з основних результатів адміністративно-територіальної реформи в Україні. Як наслідок, країна отримала новий адміністративно-територіальний устрій, нову систему місцевого самоврядування та територіальної організації. При цьому, багато процесів було впроваджено, спираючись на досвід європейських країн, що акцентовано підкреслювало євроінтеграційні прагнення. Мета статті – дослідження основних досягнень децентралізації та визначення перспектив регіонального розвитку в Україні в умовах повоєнного відновлення. Для реалізації вказаної мети використано контент-аналіз наукової літератури, який ґрунтується на відборі актуальних досліджень. Результати дослідження доводять, що територіальні громади, які сформувалися на добровільних засадах в результаті проведеної реформи, отримали нові механізми фінансування та здійснення владних повноважень на своїх територіях. Це створило чудове підґрунтя для реалізації суспільно-значущих проєктів. Реформа визначила й низку проблем, зокрема, наявні прогалини у чинному законодавстві, а також нестачу релевантного досвіду для подальшого активного розвитку територіальних громад. У висновках визначено, що дотримання європейського вектору розвитку та наближення вітчизняного законодавства до кращих європейських стандартів є запорукою успіху країни загалом та формування сильних, економічно спроможних регіонів.
Ключові слова: регіональна політика, місцеве самоврядування, територіальні громади, сталий розвиток, бюджетне планування, адміністративно-територіальна реформа.
Introduction
The modern development of power structures in the leading European countries of the world is closely related to the possibilities of using power decentralization, strengthening the position of self-government and local authorities, a certain regionalization of decisions and the influence of local elites on local political processes. Appropriate administrative changes are dictated by many factors that have concrete, practical significance and results, worked out during long-term use and need further development. In particular, digitalization is an essential modern trend, which should be considered in additional changes, as it accelerates the interaction process between the government and society, the central government and local self-government bodies (Torrisi, 2021). The issue of decentralization is also essential in view of the changes in the legislative framework structure that regulates the legislative development issue. It is necessary that the understanding of the theoretical foundations of legislation has its practical expression.
For Ukraine, as a state that was subjected to military aggression by the Russian regime and that chose a democratic model for further development, the problem of decentralization of power is extremely urgent. In particular, the large-scale administrative reform that began in 2014 demonstrated the strengths and weaknesses of decentralization in Ukrainian regions, pointing to new horizons of regional independence and autonomy (Bedrynets, 2021). The study of decentralization processes in Ukraine is relevant not only from a scientific point of view, but also due to a particular practical significance that it can be used in the future. The study of such reforms makes it possible to determine their effectiveness, vulnerable and strong points, etc. First, we are talking about structural elements such as financial, administrative and institutional sectors, which form the basis of decentralization in European countries.
The article aims to study the decentralization of power and regional development in Ukraine. Implementing the specified goal involves considering the following tasks: analyzing current scientific literature on the specified issues, highlighting the features, successes, and problems of the development of decentralization in Ukraine in comparison with modern European models, and analyzing regional development caused by decentralization.
The structure of this article consists of a short introduction, which defines the importance of the study of decentralization mechanisms in Ukraine, a literature review, which summarizes the main achievements of the authors on this topic and discusses the gaps in the research topic. The following parts consist of the results, which show the peculiarities of the implementation of European principles in the context of decentralization and the strengths of the regional development of Ukraine during the war era. Further, the study consists of a discussion where the obtained data are compared with the data of other authors and the limitations are characterized. In the last part - in the conclusions, it is substantiated that the adherence to the European vector of development and the approximation of Ukrainian legislation to the best European standards are the key to the country's success.
Literature Review
Actualization of the decentralization of local self-government and regional development of Ukraine took place due to thorough reforms of state administration and local self-government bodies, which began in Ukraine in 2014 after the Revolution of Dignity. Researchers paid attention to the conceptual foundations of decentralization in Ukraine and the formation of its legislative framework (Rudenko et al., 2020). The study of the effects of decentralization on the socioeconomic development of Ukrainian regions has become an equally relevant issue for scientific research. However, while the positive impacts of decentralization are often emphasized, the debate surrounding its challenges and limitations remains underexplored. Although decentralization in Ukraine has led to notable socioeconomic improvements at the local level (Vaskivska, 2020), significant challenges persist. A critical issue is the uneven regional development that stems from disparities in resource allocation, financial autonomy, and institutional capacities across territorial communities.
Despite increased financial independence for some communities (Lunkina & Boyko, 2020), others continue to struggle with insufficient resources, leading to imbalances that exacerbate regional inequalities. Furthermore, the positive experience of European countries regarding decentralization is often cited (Pasquier, 2021), yet the application of these models in Ukraine reveals limitations due to differences in historical, socio-political, and economic contexts. The influence of external factors (EU membership, presents both opportunities and constraints). Chacha's (2019) study highlighted how EU membership facilitates further centralization and economic growth. However, Ukraine, as a non-member state, faces distinct challenges in aligning its decentralization processes with European standards, which may hinder long-term sustainable development.
A deeper examination of the skepticism surrounding decentralization is essential. Critics argue that decentralization, in some cases, has served as a façade for the further centralization of power. Mueller & Hechter (2019) suggested that under the guise of decentralization, there has been a recentralization of authority, particularly in the areas of fiscal policy and political control. This paradox raises questions about the true autonomy of local governments and the extent to which decentralization fosters genuine self-governance versus reinforcing centralized state control. Hence, according to these challenges, it is necessary to critically assess the ongoing decentralization reforms in Ukraine. While decentralization has produced tangible benefits, such as increased local revenues and the empowerment of certain territorial communities, the broader limitations must be thoroughly examined. For Ukraine, such a discussion is extremely relevant, as it is about the balance of power, which in Ukrainian realities is often associated with political struggle and the center's attempt to subordinate the regions to itself (Uzun & Koch, 2020; Arefiev et al., 2023). Other potential challenges to the development of decentralization in Ukraine are also discussed separately.
Scientists indicate that the implementation of reforms in the administrative field will in the long run lead to a tangible improvement in the lives of citizens, further development of democracy (Tselios & Rodrнguez-Pose, 2022). The study of Gryshchenko et al. (2022) characterized the peculiarities of the territorial development of Ukrainian communities in the current conditions. This is an up-to-date study that reflects the current state of regional development of Ukraine and specific problems on the way to transparency. Therefore, this work is an important theoretical basis for research. Chernadchuk et al. (2023) organizational and legal conditions for the development of local self-government, which are an important part on the path of decentralization transformation. This research is also important because it provides relevant information about the state of decentralized development of Ukrainian communities.
Moreover, the impact of the decentralization process is felt not only in the administrative system, but also in other areas, for example, the establishment of medical care. At the same time, attention was also drawn to the problem of using different methods and approaches in the implementation of decentralization (Kuczabski et al., 2023; Buriak et al., 2023a). The path of further transformations is important, but it will also require considering existing challenges and applying models to overcome them.
Methodology
This study is based on a qualitative approach, which involved the processing of qualitative materials and the use of the content analysis method. So, the proposed study is based on content analysis of specialized scientific literature. Scientific works, particularly articles in scientific publications, chapters in collective monographs, and materials of theses of conferences, were selected for the review and analytical work. The sources were selected based on relevance to the topic of the work, relevance and relevance. In general, the most recent publications on the subject - over the last ten years - have been selected.
The data collection process consisted of the following stages: formulation of the search query, search of scientific bibliography, selection and research of sources. In particular, to search for the necessary information and scientific literature, search queries were created that contained keywords: regional policy, local self-government, territorial communities, budget planning, sustainable development, and administrative-territorial reform. The main scientific and metric databases are PubMed, Scopus, and Web of Science. The specified keywords were entered into these search databases. As a result, 565 matching results were found.
For further processing of the scientific literature, topics of articles and abstracts that could relate to the features of decentralization both in Ukraine and in Europe and the world were analyzed. Based on this approach, the total number of sources was reduced to 144 positions. All results were further analyzed for appropriateness and relevance. As a result, the number of materials decreased to 129 items. All received publications were transferred to an Excel table, where the year of the required publication, the methodology and the main proposed results were also recorded. As a result, additional literature exclusion criteria were applied:
Taking these criteria into account, 54 items of literature were selected. In the future, an additional analysis of the selected studies was carried out, where the text of the scientific publication was examined directly. The main criterion is the presence of scientific novelty. So, as a result, 33 publications were identified, which became the basis for the proposed study.
The data analysis involved the use of the comparison method, based on which the obtained data were compared with those results that are present in other works. In addition, the work uses the method of synthesis, which made it possible to synthesize and summarize the key aspects of the development of decentralization in Ukraine.
Results and Discussion
Implementation of the process of power decentralization in Ukraine is based on European experience. The multifaceted nature of this process is based on certain principles: active citizen participation in decision-making, strengthening of local self-government, and formation of more optimal models of administrative organization and development, which best realizes the possibilities of involving citizens in managing affairs (Table 1).
Table 1.
European principles of decentralization
Following the implementation of the reform of the decentralization of power in Ukraine. Several changes in legislation took place, making it possible to bring the Ukrainian administrative model of power closer to European models. The decentralization reform introduced a new structural administrative-territorial link – the United Territorial Community. The new units became the legal successors of all the rights and property of the voluntarily united communities. Reorganization of village, settlement and city councils was carried out accordingly (Shevchuk, 2023).
Territorial Communities has had opportunities to receive additional funding through redistribution in the system of taxes, fines, and fees. Holding local elections made it possible to create new local governing bodies, which involved the majority of active citizens in the management of regional affairs. Performance increased due to the already mentioned redistribution of finances and taxes. As a result, local budgets received additional funding, which opened up opportunities for the implementation of planned projects that were painful for the local population (Vasyltsiv et al., 2021). As the researchers determined, the process of decentralization of power was positively perceived by the population. Such a reform became an important element of the European integration of Ukraine, particularly in ensuring the democratization of power.
At the same time, there were critical remarks about the reform. First of all, the inconsistency of the legislation in realising individual property rights of territorial communities was pointed out. For example, the possibility of using land plots that were part of the United Territorial Community outside the settlements' boundaries was not agreed upon. Difficulties also arose when establishing cooperation with representatives of district and regional administrations in the field of division of powers, allocation of budget funds and participation in the implementation of individual projects (Zhuravel & Diorditsa, 2023). Another problem was that many representatives of the OTG were new people without appropriate administrative and managerial experience. Accordingly, these difficulties will still need to be resolved.
Decentralization of power had a tangible positive impact on the regional development of Ukraine. First of all, the strengths of the region's development have significantly increased. Researchers note that certain financial liberalization made it possible to strengthen the investment attractiveness of certain regions to ensure the development of local, territorial communities on the basis of competitiveness, implementation and use of strategic advantages (geographical location and logistics, redistribution of profits from minerals, land resources, etc.). It has also become important to emphasize the peculiarities of regions, in particular in the field of advertising cultural wealth and historical heritage (Fabuš et al., 2019).
The possibilities of using the tourist potential made it possible to obtain additional financing from taxes, and the establishment of cooperation with international institutions opened opportunities for obtaining soft loans and grants for the development of local businesses, local projects, etc. It is important to note that the emphasis not only on industrial production but also on the service sector and the high-tech industry has become a relevant aspect of regional development. The advertising of individual regions as IT clusters made it possible to concentrate startups, outsourcing companies, etc., which makes it possible to prospectively assess their development (Slijepčević et al., 2020). In addition, decentralization orients Ukrainian regions to European models of development, which is promising from the point of view of further European integration of Ukraine.
The active implementation of the decentralization reform in Ukraine has caused a gradual shift in the focus of local development from the regional level to the level of united territorial communities. Researchers note that the decentralization of power as a whole and the deepening of community opportunities had a positive impact, because they brought the goals of the reforms closer to realizing the needs of ordinary citizens (Lisova et al., 2021) (See Figure 1).
However, the redistribution of power and material resources to the community level causes "laundering" of funds from the budgets of the regional level, which significantly reduces the effectiveness of the regional management level. The motivations that caused this state of affairs were explained in a rather wide range: from providing the full financial power to communities as the main goal of the work of the regional government to the deliberate slowing down of the formation of united territorial communities (Lunkina & Boyko, 2020; Krap et al., 2024). However, the practice of harmonious development of local authorities based on the positions of "strong communities - strong region" proposed by the reform has not been widely spread.
Regional policy as a well-thought-out and directed system of measures aimed at developing a separate region as an integral territorial-economic and social system has receded into the background during the formation of strategic industry policies and in the regulatory work of state authorities. This situation led to the fact that regional policies remained implicit in the form of implementation (Zhuravel & Diorditsa, 2023). Its implementation usually led to the approval of certain general norms, discussion and distribution (redistribution) of financial and other resources (Uzun & Koch, 2020). Regulatory documents relevant to regional development are not adopted systematically but only periodically with a limited range of applications. Such a non-periodic nature, according to scientists, needs to be revised given the realities of wartime.
There is a need for a deeper understanding of the connections between the decentralization policy and other constituent elements in ensuring the socioeconomic development of Ukraine's regions. Although there is talk of preserving and expanding existing powers to strengthen the responsibility of authorities at the regional and local levels, nevertheless, an important element is the ability of the power institutions of the structure to effectively use the received resources (Torrisi, 2021; Bobro et al., 2024). There is also talk of the need to establish cooperation with united territorial communities so that regional policy becomes an important link in the cooperation of central and local state authorities.
In addition to such normative and regulatory cooperation, researchers also note other problems in the functioning of regional development. First of all, there is a lack of funding, which prevents the implementation of most of the necessary projects (Bedrynets, 2021). A real negative scenario of regional development is one in which the institutional strengthening of united territorial communities will reach a certain level, which will not allow further improvement of the socioeconomic situation in successful communities and will not allow the socioeconomic revival of regional outsiders to be achieved.
There is also a scientific problem. In Ukrainian realities, the science of regions (or regional studies) has not received wide development. Due to scientific disputes regarding the criteria for the formation of regions, their territorial system, no general recommendations or forecasts for their development have been developed (Rudenko et al., 2020; Shevchuk, 2023; Bobro, 2024). Accordingly, not all consequences of decentralization receive due attention from scientists.
The military challenge for the regional development of Ukraine has also become highly urgent. Against the background of the attempts of the Russian regime to sow enmity in Ukrainian society, the primary task at the regional level is the need to implement steps to create a united Ukrainian socioeconomic and humanitarian space, to determine the priorities of interregional cooperation and interregional projects that will contribute to the unification of Ukraine. The proposed advantages and disadvantages of the regional development of Ukraine due to decentralization can be systematized in the form of a table (Table 2).
Table 2.
Strengths and vulnerabilities of regional development in Ukraine
Therefore, regional development in Ukraine as a result of the decentralization of power has its vulnerabilities and strengths. Abstracting from internal Ukrainian processes, the influence of the military factor cannot be ignored, as it directly impacts the situation in Ukrainian regions, inhibiting the positive gains of the administrative reform.
Certain elements of decentralization and the formation of relevant power structures, the implementation of their powers, still need to be determined. Therefore, the article aimed to study the decentralization of power and regional development in Ukraine. It was established that the decentralization process generally corresponded to the European principles of carrying out reforms of this kind. In particular, thanks to the formation of new united territorial communities, it was possible to improve the situation with the functioning of local government institutions, financing and solving social requests, democratizing management and involving citizens in managing local affairs. This confirms the conclusions of other researchers, who considered the decentralization of power to be an important stage of the European integration of Ukraine (Ishchenko et al., 2021; Lisova et al., 2021).
At the same time, certain general principles, the importance of which was emphasized by European researchers (Bruzelius, 2020), may cause reservations in Ukrainian realities. First of all, we are talking about taking into account the results of the will of the population and its involvement in the legalization of government decisions, in particular - the discussion and adoption of certain issues at local referenda or as a result of the implementation of other forms of direct expression of the will of the population. For European practice, especially in countries with a federal system, such practices are considered normal (Guderjan & Verhelst, 2021). For Ukraine, such initiatives can be harmful: Russian aggression in 2014 undermined the concept of a "referendum", which acquired a distinctly negative association in Ukrainian society.
The obtained results confirm the researchers' conclusions that the decentralization of power in Ukraine posed new challenges to the formation of the state's regional policy (Buriak et al., 2023b). It is about the importance of establishing cooperation between the central government, regional and united territorial communities. Such conclusions generally correlate with the findings of other scientists (Kyriacou & Roca-Sagalés, 2019), including Asian ones (Maryanti et al., 2022); that is, we are talking about a completely typical problem for many countries. The proposed results also determine the need for further development of the scientific and theoretical justification of regionalization, which in Ukrainian realities has not been given as much attention as it is next to the digitalization of the management process (Kichurchak, 2023).
However, the proposed results have certain methodological limitations. It is said, first of all, that the article is based on the analysis of scientific literature. At the same time, the military aggression of the Russian regime creates new realities of regional policy formation. First of all, the results of this aggression are unknown since the war continues, and its destructive impact will be felt for a long time. In addition, modern European states have not faced crises of this type, so not all proposed action algorithms can be implemented in the Ukrainian version.
Conclusions
Therefore, the decentralization in Ukraine positively affected the improvement of the administrative system and the development process of regions. First of all, it is worth noting the role of territorial communities, which were formed as a result of the carried out reform voluntarily, received financing mechanisms and exercised power and administrative powers in their territories. This led to a new filling of local budgets (according to the updated rules) with the attraction of additional funds to implement projects (in case of winning individual grant programs, etc.).
The positive dynamics, however, contain certain shortcomings, primarily related to gaps in the legislation, imbalance of powers between the united territorial communities and authorities at the district and oblast levels, and lack of experience for further active development of territorial communities. These problems can be solved by a more active introduction of European norms regarding the establishment of cooperation between separate levels of administrative power. The decentralization made it possible to fill local regional budgets with new revenues, but questions arose regarding redistributing resources and developing legislative regulatory mechanisms. A separate problem is Russian military aggression, which significantly affected the capabilities of the regions, especially in the south and east of Ukraine.
Future scientific endeavors ought to concentrate on perfecting legal structures to bridge current deficiencies, fortifying the equilibrium of authority among various governmental tiers, and devising methods to strengthen the robustness and progress of local communities against external challenges.
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