Fiscal Decentralisation as a Factor of Macroeconomic Stability of the Country

The main purpose of the study is the role and effect of fiscal decentralization on macroeconomic stability on key measures that represent different and independent indicators of the degree of fiscal decentralization. It is proposed to use the fiscal decentralization as an indicator of expenditure decentralization, which is calculated as the ratio of subnational to total government expenditure, income decentralization as the ratio of subnational own source revenue to total government revenue. Along with the indicators of fiscal decentralization, it is proposed to take into account the potential economic, political and institutional determinants of macroeconomic stability that can be classified into the following groups: growth and development; indicators of the labor market; openness of the economy; monetary indicators; independence of the central bank; political system; corruption. The application of the proposed determinants has shown a non-linear relationship between fiscal decentralization and macroeconomic stability.