Decentralisation And Territorial Amalgamations: The Effect On Public Expenditures And Incomes In Ukraine

In this paper we study the effect of decentralisation and voluntary territorial communities' amalgamations in Ukraine, which started in 2014. We use an extensive panel of a very detailed local budget data over 2012-2018. Employing dynamic treatment effects (TE) model, we estimated cohort-specific average treatment effects on the amalgamated territorial communities (ATCs) as well as the interaction-weighted average effect. Our findings show that both ATCs' local revenues and expenditures have systematically increased due to the reform over time. We have also compared our results with the static fixed effects model and concluded that it produces imprecise estimates compared to the dynamic TE models.