Since October 1, 2008, the Institute for Budgetary and Socio-Economic Research (IBSER) implemented the Municipal Finance Strengthening Initiative (MFSI) project with the support of the United States Agency for International Development (USAID).
Project Objective
The main objective of the project was to enhance the capacity of cities to plan and finance local development initiatives, particularly in the field of municipal infrastructure, by increasing their own-source revenues and attracting alternative financing mechanisms.
Key Areas of Activity
The project aimed to support national and local authorities in the following areas:
● Improving the legislative and regulatory framework to boost fiscal autonomy, enhance municipal competitiveness, and promote local infrastructure development, especially in the utility sector;
● Supporting budget reform efforts by strengthening the ability of local governments to develop realistic municipal infrastructure development strategies and implement the program-based budgeting (PBB) method at both national and local levels;
● Developing and introducing innovative financial mechanisms necessary for implementing infrastructure strategies in pilot cities;
● Improving the regulatory environment for municipal borrowing on domestic and international financial markets.
National-Level Activities
At the national level, IBSER experts worked on enhancing legislation and regulations related to:
● Tax reform,
Increasing municipal creditworthiness,
● Improving budget planning and execution rules and procedures.
The team contributed to amending existing laws and drafting new legislation and by-laws, helping to eliminate obstacles to the financial sustainability of local self-governments.
Local-Level Activities
Locally, the project focused on continuing the rollout of program-based budgeting, initiated earlier under USAID’s Local Budget Reform Project (LBRP). IBSER worked closely with the Ministry of Finance of Ukraine to develop methodological guidance and conduct training for financial officials across four pilot oblasts, as per MoF Order No. 1172 of September 22, 2008 “On the Basic Approaches to the Introduction of Program-Based Budgeting.”
In parallel, IBSER specialists adapted international best practices and introduced innovative financing mechanisms for energy efficiency improvements in municipal infrastructure.
Pilot Cities and Public-Private Partnership Support
Five pilot cities served as the basis for:●
Specialized training in financial optimization of municipal plans;
● Guidance in developing and implementing public-private partnership (PPP) contracts to support local infrastructure projects.
Dissemination and Communication
To support project goals and share outcomes, IBSER utilized a variety of tools:●
Organizing financial and economic forums to facilitate expert and public dialogue on current policy issues;●
Convening meetings of the National Consultative Council (NCC) to coordinate the efforts of all budget process stakeholders;
● Publishing regular outputs, including:
- Monthly reports with key budgetary and banking indicators,
- Quarterly brochures,
- Semi-annual budget process analyses,
- Annual publications, such as “Innovative Practices: Local-Level Financial Management”;
- Circulating a monthly electronic bulletin to partners and stakeholders;
- Engaging actively with national and local media outlets to inform the public about project goals, fiscal reforms, and policy recommendations.