GOVERNMENTAL MECHANISMS FOR ENSURING THE FINANCIAL STABILITY OF LOCAL COMMUNITIES IN THE CONTEXT OF UKRAINE’S NATIONAL RECONSTRUCTION POLICY

Abstract

This article examines the theoretical and methodological foundations and administrative mechanisms for ensuring the financial stability of local communities within the framework of Ukraine’s state policy on reconstruction. The relevance of the study stems from the transformation of the institutional environment of public administration amid wartime challenges, the need to develop effective mechanisms for post-war recovery policy, and the growing role of local communities in the implementation of state regional policy. It has been established that the financial sustainability of a local community within the public administration system is an integral characteristic of its resource capacity and administrative potential, reflecting the ability of local self-government bodies to ensure the stable performance of public functions, support territorial development, and adapt to socioeconomic and security challenges. This study analyzes the key factors influencing the financial stability of local communities in the context of public administration mechanisms. These factors include the resource base of local budgets, their level of balance, the investment potential of the territories, and the availability of financial reserves. It is demonstrated that the institutional capacity of local self-government bodies, the quality of management decisions at the local level, and the effectiveness of state mechanisms for regulating interbudgetary relations and supporting territorial development play an important role in ensuring the financial stability of communities. A conceptual model for ensuring the financial sustainability of local communities is proposed, which reflects the interrelationship between the institutional and legal framework of public policy, management tools for regulating local finances, and the system of indicators for evaluating the performance of the community budget system. A methodological approach has been developed for assessing the financial sustainability of local communities based on a comprehensive index that synthesizes indicators of resource capacity, budgetary balance, investment activity, and financial reserves. Based on this, a typology of local communities by level of financial stability has been developed, which allows for the differentiation of communities based on their resource potential and the identification of priority areas for state support within the framework of territorial recovery policy. The practical significance of these findings lies in the potential to use the proposed approaches to improve public policy mechanisms for the development of local communities, enhance the efficiency of financial resource management at the local level, and inform sound management decisions in the implementation of Ukraine’s national recovery policy.