ECONOMIC AND MATHEMATICAL MODELING OF THE EFFECTS OF DECENTRALIZATION OF ECONOMIC POWER INSTITUTIONS

The article examines the impact of the decentralization of economic power institutions on the financial stability of territorial communities and the macroeconomic dynamics of Ukraine. The purpose of the study is to construct an economic and mathematical model based on an integrated indicator of financial stability that allows assessing the effects of decentralization processes and determining the nature of their relationship with the dynamics of real GDP in Ukraine. The relevance of the research is driven by the need for quantitative diagnostics of decentralization reform outcomes and the justification of its economic consequences in the context of strengthening the financial autonomy of communities. Economic-statistical, correlation-regression, and economic-mathematical methods were applied to assess the relationships between the level of financial stability and macroeconomic indicators. Statistical data for 2018–2024 were used, including real GDP and indicators of decentralization efficiency. The index of financial stability of communities was calculated based on normalized values of six indicators: the expenditure decentralization coefficient, the revenue decentralization coefficient, the tax decentralization coefficient, the financial autonomy index, the financial dependence coefficient, and the budget self-sufficiency index. The study established a significant relationship between the financial stability index and real GDP dynamics. The constructed model revealed a statistically significant inverse relationship between the level of financial stability of territorial communities and the dynamics of real GDP, indicating the contradictory short-term effects of decentralization. At the same time, in the long-term perspective, an increase in the positive impact of decentralization processes is expected, provided that the institutional capacity of local self-government is strengthened. The practical value of the study lies in the possibility of using the obtained results to improve state policy, develop regional development strategies, and ensure the efficient allocation of resources in the process of post-war recovery.