Development of territorial communities: aspects of natural capital conservation and budget financing

ABSTRACT

The development of efficient local governance and establishment of comfortable conditions for the living activity are the major strategic tasks of the public governance and authorities' decentralization system modernization that is currently underway in Ukraine. The complicated socio-environmental and economic situation faced by Ukraine due to the deployment of military and political events, the collapse of the national currency, the deformation of industrial infrastructure, the depletion of natural capital, the exhaustion of natural resources, the spread of coronavirus infection COVID-19, and other destabilizing factors constitutes an incredibly high threat to the socio-political and economic security of the state as a whole and of each territorial community (TC). In this perspective, each element of the complex national economy system is important and should be translated into the principles of intellectualization in a strategic perspective. Today, the economic systems of both the state and the TCs are largely supported by international organizations – mainly through the provision of international loans and grants. The harmonization of national legislation on the preservation and reproduction of natural capital with European directives is the priority area of the foreign policy of Ukraine. Cooperation with international organizations sets a number of requirements for Ukraine, including the transparency of financial flows and natural capital accounting. Clear regulation of accounting, storage, and reproduction of natural capital is an urgent task of the public administration system. Taking into account the fact that climate security is a global problem, adaptation of national standards to European directives will make it possible to unify the information support of public finances and form a strategy for the development of natural capital. The main factors of economic efficiency in the Republic of Poland and Ukraine are compared. The research verifies the regression relationships between budget funding of territorial communities and the population of these territorial communities and provides conclusions about the efficiency of TCs' funding in Ukraine.