Financial Support for Capacity of Local Communities: Problems and Solutions

Among the problems of formation of a modern system of governance in place much emphasis is laid on the reform of local government, which will determine the further sustainable development of Ukrainian society. The article aims to outline the main problems of formation and building of capacity of local communities and formation of ways promoting entrepreneurship, efficient use of local resources, creation of jobs, expansion of the tax base of local budgets and more. The basic methods of scientific research, induction and deduction, analysis and synthesis method of comparison have been used. It has been determined that the formation of a functioning local community in Ukraine must, in addition to using the positive experience of the Member States, should also consider the national status of local government, including historical, geographical, economic and demographic aspects, not mechanically copying foreign experience. The general theoretical position regarding the capacity of local communities, the essence of the concept of territorial community capacity in terms of decentralization have been analyzed in the article. The role of territorial communities in the development of local self-developed theoretical and methodological approaches to determining the level of ability of local community, based on comprehensive assessment of the capacity of political, economic, and spiritual integrity systems and their resource potential have been analyzed. Ways of building the capacity of territorial communities and their transition to economic self-development have been established. Forms, methods and mechanisms of cooperation of the local community and local authorities have been suggested. Generalizing conclusion has been made that the most effective solution of these problems can be achieved only through structural reform of the whole system of local finance, including vectors of financial decentralization and deconcentration of power. Further studies will be used to clarify the methodology for assessing the financial capacity of the territorial community of the use of idle resources at the time of the study and evaluation of investment projects related to attracting new sources of financial capacity of the local community.