Draft Law on the Budget Code is not about decentralization, although it has some positive developments.
By Ilona Sologub (Kyiv School of Economics, Ukraine)
On August 8th, the government registered the Draft Law on changes to the Budget Code concerning decentralization. The draft law has already received some complimentary as well as some negative (here and here) feedback. Since the Draft Law was supposed to become an integral part of the decentralization reform package, this post analyzes it from this point of view. The main conclusions are:
- The proposed amendments to the Budget Code do not correspond with the logic of the reform and with the Decentralization Concept adopted by the government.
- It seems that the main motivation behind the proposed Budget Code amendments was “making the central government look good” by transferring all problematic issues, such as cultural and ecological projects, renovation of housing, etc. to the local level while keeping the most “electorally valuable” spheres, such as education, healthcare, and social protection under the central government hand.
- The Draft Law contains some positive developments, such as the new system of calculating inter-budgetary subsidies and somewhat eased procedures for obtaining external loans by local governments.
The more detailed analysis is presented below.