EVOLUTION OF SCIENTIFIC THOUGHT ON THE DECENTRALIZATION OF PUBLIC FINANCES: A VIEW THROUGH THE PRISM OF MARTIAL LAW AND CHANGES IN THE GLOBAL ORDER

Abstract

This article presents a comprehensive analysis of the transformation of classical theories of fiscal decentralization under contemporary security challenges, in particular hybrid threats and large-scale armed aggression against Ukraine. The author examines both historical models based on the principles of economic efficiency and modern concepts aimed at ensuring the adaptability of public finances, mobilizing resources for defense, and preserving national integrity. The article conducts a critical review of the literature, elucidates the advantages and disadvantages of the traditional Oates theorem, and analyzes alternative approaches, including the concepts of fiscal resilience, inclusive fiscal federalism, and innovative decentralization. The author notes that excessive fragmentation of fiscal authority complicates the rapid mobilization of resources, whereas centralization may threaten local initiative and the ability of communities to respond swiftly to local challenges. The study emphasizes the necessity of balancing centralization and decentralization in the formation of intergovernmental fiscal relations, which is crucial for ensuring the resilience and adaptability of communities during crises. Institutional mechanisms that promote transparency, accountability, and interaction among various levels of government, as well as the impact of digital transformation on the modernization of public finances, are discussed. The author demonstrates that integrating security imperatives with traditional economic models is essential for building a system capable of adapting to changes in the global security landscape and ensuring social cohesion. Consequently, the article underscores that further reforms in fiscal decentralization must address both the strategic needs of national security and local particularities, thereby creating flexible, inclusive, and resilient models of intergovernmental governance under martial law.