Baltic Journal of Economic Studies 219 Vol. 10 No. 4, 2024 This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 1 Classic Private University, Ukraine E-mail: diplometals@gmail.com ORCID: https://orcid.org/0009-0001-1857-3099 DOI: https://doi.org/10.30525/2256-0742/2024-10-4-219-228 ON THE ISSUE OF INTERACTION BETWEEN STATE EXECUTIVE AUTHORITIES AND LOCAL SELF-GOVERNMENT BODIES IN UKRAINE AND THE EU COUNTRIES Oleksiy Kavylin1 Abstract. The purpose of the article is to study the mechanism and problems of interaction between public executive authorities and local self-government bodies in Ukraine and to determine the specifics of its implementation in the EU countries with a view to possible implementation of the European experience into the national legislation of Ukraine. Methodology. The study is based on the analysis of the legal framework and theoretical provisions on defining the system and guarantees of state executive authorities and local self-government bodies in Ukraine, the principles of organisation and operation, legal status and responsibility of such bodies and officials. The system of local self-government bodies in Ukraine and the EU countries, as well as the specifics of the territorial structure of some of these countries (in particular, France and Germany) are studied. It is emphasised that local self- government in the State is a significant indicator of the level of centralisation or decentralisation of State power, the level of democracy, the content of the existing political regime, and the prevalence of democratic or autocratic tendencies. A high level of development of local self-government ensures the democratic nature of the political regime and is a manifestation of the democratic policy of the State. The article analyses the problems of legislative support for interaction between public authorities and local self-government bodies, distribution of powers between them, and identifies ways to improve them. Results. In the course of studying the mechanism and problems of interaction between state executive authorities and local self-government bodies in Ukraine and the EU countries and based on the analysis of the current regulatory framework, the author substantiates the need to reform the system and principles of cooperation between local state administrations and local self-government bodies in Ukraine. The author emphasises the need to bring domestic legislation in line with international standards. Based on foreign experience and analysis of Ukrainian legislation, the author concludes that the ways to overcome the problems of interaction between state executive authorities and local self-government bodies in Ukraine include: the need for a certain level of independence of local authorities in the ways they exercise their powers; and a clear delineation of the functions of local state administrations and local self-government bodies at the legislative level; legislative regulation of regular close cooperation between the government and local self- government bodies; introduction of effective mechanisms for coordinating decisions of central and local executive authorities; settlement of the problem of delegation of executive powers to local self-government bodies; creation of a mechanism for effective state control over the legality of the exercise of powers by local self-government bodies. Practical implications. The paper provides proposals for taking into account the experience of the EU countries regarding the interaction of local self-government bodies with public authorities. This is especially true with regard to maintaining a balance in terms of the optimal combination of functions, rights and obligations of such bodies, as well as the balance between state control over the activities of hromadas of villages, towns and cities (which exercise local self-government) and a certain level of independence of local authorities in the ways they exercise their powers. Value / Оriginality. The article provides proposals for amendments to the legislation of Ukraine in the field of local state administrations and local self-government. This applies, in particular, to the issue of harmonisation of the provisions of the following Laws of Ukraine: "On Local Self-Government in Ukraine" of 21.05.1997, No. 280/97-ВР and “On Local State Administrations” of 9 April 1999, No. 586-XIV. Keywords: local self-government, local state administrations, state executive authorities, decentralisation, local self-government system, interaction. JEL Classification: А12, D72, E65, H10, H79, R58 Baltic Journal of Economic Studies 220 Vol. 10 No. 4, 2024 1. Introduction The study focuses on the interaction between state executive authorities and local self-government bodies in Ukraine and the EU. Primarily, it is necessary to emphasise that local self-government is one of the main elements that create the basis for reforming the administrative state apparatus. Local self-government is the basis for decentralisation of power and is the main link between the authorities and the population in cities. Local self-government is a special area of activity that focuses on the interests and specific needs of the entire community. The effective development of the local self-government system is a prerequisite for the progress of civil society institutions in a country. The existence of local self-government in a country not only indicates the possibility of people exercising their power at the local level, but also creates an opportunity to meet their immediate needs by reconciling national and local interests, which is one of the main features of a modern democratic government system. Important and somewhat controversial are the issues of interaction between state executive authorities and local self-government bodies, as well as between local self-government and civil society. Such interaction is a special type of administrative legal relations entered into by the relevant authorities or their representatives in order to implement common goals and objectives in the field of state and municipal administration on the basis of equality and optimal balance of interests of both the state and the relevant community. Today, Ukraine's public administration system needs to be improved, including in the area of separation of powers between executive authorities and local governments. The problems of interaction between state executive authorities and local self-government bodies, as well as interaction between local self-government bodies and civil society, have been studied in the scientific works of Ukrainian and foreign scholars, such as O. Babikov, V. Bebyk, R. Voitovych, I. Hrytsiak, V. Kalashnykov, V. Kovalenko, V. Kampo, V. Karpenko, V. Komarovskyi, V. Korolko, V. Korniienko, V. Kravchenko, V. Malynovskyi, Ya. Malyk, V. Mamonova, N. Nyzhnyk, H. Odintsova, P. Petrovskyi, V. Shapoval and others. Thus, in his works, I. Hrytsiak paid attention to the characteristics of deconcentration and decentralisation in public administration. V. Kampo investigates the problems of delimitation of competences of two centres of public power at the local level. The issues of the European experience of organising local self- government and interaction between state bodies and local self-government bodies have been studied by scholars Yu. Boiko, O. Boryslavska, V. Velychko, O. Hostieva, I. Zaverukha, B. Kopyl, T. Steshenko, A. Shkolyk and others. The purpose of the article is to identify the main problems of interaction between public authorities and local self-government bodies in Ukraine and the ways of their solution, and also to make a comparative analysis of Ukrainian legislation and legislation of some EU countries in this area. 2. State Executive Authorities and Local Self-Government Bodies in Ukraine and the EU: Current Status and Peculiarities of Their Structure In Ukraine, issues related to state executive authorities and local self-government bodies are primarily regulated by the provisions of the Constitution of Ukraine. These are, in particular, Chapters: IV "Verkhovna Rada of Ukraine", VI "Cabinet of Ministers of Ukraine. Other Executive Bodies", and Chapter XI "Local Self-Government" (The Constitution of Ukraine, 1996). Issues related to the system and guarantees of local self-government in Ukraine, the principles of organisation and operation, legal status and responsibility of local self-government bodies and officials are regulated mainly by the Constitution of Ukraine and the Law of Ukraine "On Local Self- Government in Ukraine", as well as the Laws of Ukraine: "On Local State Administrations" No. 586-XIV of April 9, 1999, "On Service in Local Self-Government Bodies" No. 2493-III of June 7, 2001. In their work, local self-government bodies are also guided by the Laws of Ukraine: "On the Principles of State Regulatory Policy in the Sphere of Economic Activity", "On Military-Civilian Administrations", "On State Registration of Legal Entities, Individual Entrepreneurs and Public Organisations", "On the Legal Regime of Martial Law", "On Access to Public Information", "On the Status of a Deputy", "On the Status of Deputies of Local Councils", "On the Election of Deputies and Heads of Village, Settlement, District, City, District in Cities, and Regional Councils", the Budget Code of Ukraine and other regulations. State power is exercised on the basis of its division into: legislative, executive and judicial. The only legislative body is the Parliament, i.e., the Verkhovna Rada of Ukraine. The supreme body in the system of executive authorities is the Cabinet of Ministers of Ukraine. It directs and coordinates the work of ministries and other executive bodies. The system of central executive authorities includes ministries, state committees (civil services) and central executive authorities with special status. In turn, central executive authorities may have their own territorial bodies, which are formed, reorganised and liquidated in accordance with the procedure established by the legislation of Ukraine. The system of local executive authorities includes local state administrations that exercise executive power in oblasts, districts, districts Baltic Journal of Economic Studies 221 Vol. 10 No. 4, 2024 of the Autonomous Republic of Crimea and in the cities of Kyiv and Sevastopol. The local state administration exercises executive power within the limits of its powers on the territory of the respective administrative-territorial unit. It also exercises the powers delegated to it by the relevant council. The Cabinet of Ministers of Ukraine is a collegial, supreme executive body of Ukraine (Tolstoukhov, 2007, p. 9). The Cabinet of Ministers of Ukraine is responsible to the President of Ukraine and the Verkhovna Rada of Ukraine. It is under the control and accountability of the Verkhovna Rada of Ukraine within the limits provided by the Constitution of Ukraine. At present, there are twenty ministries in Ukraine, with forty-nine central government agencies subordinated to them. Ministers are appointed by the Verkhovna Rada of Ukraine. Heads of central executive bodies that are not part of the Cabinet of Ministers are appointed by the Cabinet of Ministers (The Constitution of Ukraine, 1996). The activities of public services, agencies and inspectorates are coordinated and directed by the relevant minister, but not in a timely manner, but through regulations. Ten state bodies are directly subordinated to the Cabinet of Ministers of Ukraine, namely: State Statistics Service; Bureau of Economic Security; State Nuclear Regulatory Inspectorate; Commission for Regulation of Gambling and Lotteries; State Regulatory Service; State Property Fund; National Agency on Civil Service; National Agency for Prevention of Corruption; Antimonopoly Committee; and Anti-Corruption National Agency (Government portal. URL: https://www.kmu.gov.ua/). In order to guarantee the efficacious exercise of governmental powers, the working collegial bodies of the Cabinet of Ministers of Ukraine – governmental committees – were established in 2000. Executive power in oblasts and districts, the cities of Kyiv and Sevastopol is exercised by local state administrations. A local state administration is a local executive body and is part of the system of executive authorities. Within the limits of its powers, it exercises executive power on the territory of the respective administrative-territorial unit, as well as exercises the powers delegated to it by the respective council. Local state administrations within the respective administrative-territorial unit shall ensure: 1) implementation of the Constitution, laws of Ukraine, acts of the President of Ukraine, the Cabinet of Ministers of Ukraine, and other higher-level executive authorities; 2) law and order, observance of the rights and freedoms of citizens; 3) implementation of state and regional programmes of socio-economic and cultural development, environmental protection programmes, programmes for the establishment of Ukrainian national and civic identity, and in areas where indigenous peoples and national minorities live compactly, programmes for their national and cultural development; 4) preparation and approval of forecasts of relevant budgets, preparation and implementation of relevant budgets; 5) report on the implementation of relevant budgets and programmes; 6) interaction with local self-government bodies; 7) exercise of other powers granted by the state and delegated by the respective councils (Articles 1 and 2 of the Law of Ukraine "On Local State Administrations") (The Law of Ukraine "On Local State Administrations", 1999). With regard to local self-government in Ukraine, it should be noted that Article 140 of the Constitution of Ukraine states the following: "Local self-government is the right of a hromada – residents of a village or a voluntary association of residents of several villages, towns and cities – to independently resolve issues of local importance within the framework of the Constitution and laws of Ukraine. According to the Law of Ukraine "On Local Self- Government in Ukraine" No. 280/97-ВР of 21.05.1997 (Article 1), a hromada is defined as residents united by permanent residence within a village, town or city that are independent administrative units, or a voluntary association of residents of several villages, towns or cities that have a single administrative centre (The Law of Ukraine "On Local Self-Government in Ukraine", 1997). The system of local self-government in Ukraine includes: 1) a hromada; 2) a village, town or city council; 3) a village, town or city mayor; 4) executive bodies of a village, town or city council; 5) a starosta; 6) district and regional councils representing common interests of hromadas of villages, towns and cities; 7) bodies of self-organisation of the population. Citizens of Ukraine exercise their right to participate in local self-government by belonging to the respective hromadas. At the same time, any restrictions on the right of Ukrainian citizens to participate in local self-government based on their race, skin colour, political, religious and other beliefs, gender, ethnic and social origin, property status, length of residence in the relevant territory, language or other characteristics are prohibited (The Law of Ukraine "On Local Self-Government in Ukraine", 1997). Local self-government bodies are an independent type of public authority. They represent the interests of hromadas and act on their behalf. The financial basis of local self-government bodies is local budgets. Ukraine has a so-called French system of local self-government, which is based on cooperation and dialogue between different governmental institutions (Kondratska, 2015, p. 13). First and foremost, it is the interaction between state executive authorities and local self-government bodies. Baltic Journal of Economic Studies 222 Vol. 10 No. 4, 2024 In 1997, Ukraine ratified the European Charter of Local Self-Government (1985) (The European Charter of Local Self-Government, 1997), which is not only a part of national legislation, but also the legal basis for local self-government in Europe (Ukraine has taken another step towards establishing European standards of local self-government. URL: https://www.kmu.gov.ua/news/247571450). This is the fundamental document that regulates the activities of local self-government in the EU. Local self- government issues are also regulated by the following international documents: World Declaration of Local Self-Government, 1985 (revised 1993); European Framework Convention on Transfrontier Co-operation between Territorial Communities or Authorities, 1980; Framework Convention for the Protection of National Minorities, 1995. (Svyda, 2015); (The European Charter for Regional or Minority Languages, 1992); (The European Landscape Convention, 2000). All these documents have led to the modern development of the main systems of local self- government not only in Europe but also around the world. When determining the system of local self- government in a particular state (and, accordingly, the specifics of interaction between state executive authorities and local self-government bodies), it is necessary, first of all, to take into account the historical conditions of local self-government development in different parts of the world. On this issue, D. Spivak aptly notes that "when analysing the place and role of local self-government in the political system, the main emphasis is usually placed on whether they are an integral part of the state mechanism" (Spivak, 2012, p. 113). That is, the specifics of interaction between state executive authorities and local self- government bodies. Depending on the theory on which a particular state relied in the process of forming a local government system, two main models of local government have emerged in the world, namely the Anglo-Saxon and French (continental) models. There are also mixed, Iberian and Soviet models. The main criterion for classification is the principles of relationship and division of competence between central and local governments (Slesar, 2015, p. 125). The Anglo-Saxon model of local self-government is inherent, in particular, in such countries as the United Kingdom, the United States, Canada, Australia, New Zealand, etc. It provides for the election of representative bodies in all administrative-territorial units of the country for a term of three to four years. Local governments act as autonomous bodies, within the limits of their powers, obviously. At the same time, there is no direct subordination of subordinate bodies to superior ones. In addition, the population of the territorial unit directly elects some officials, in particular, mayors in cities. This model is characterised by the absence of authorised representatives of the central government on the local level (Steshenko, Shpak, 2016)  . However, the French model of local self-government is more widespread in Europe, including in the EU. The EU currently has 27 Member States: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Hungary, and the United Kingdom. The French (continental) model of local self- government, in particular, is inherent in such countries as: France, Germany, Poland, Belgium, Italy, Bulgaria, Finland and some others. This model of governance is based on a combination of state administration and local self-government. It is characterised by accountability and subordination. The peculiarity of the French model of local self-government is that state and local authorities harmoniously complement each other in various spheres of hromada life. It is characterised by an optimal combination of local self-government and local administrations, i.e., local government bodies. The French (continental) model is also characterised by the following: elected and appointed local self- government officials; somewhat limited autonomy of local self-government; the presence of special state commissioners in the hromada whose duties include control of local self-government bodies; and hierarchy in the local self-government system. It can be noted that the model of local governance under consideration is a hierarchical pyramid, as it is characterised by a certain subordination of lower levels to higher ones (Khriplyvets, 2010). This model of governance is typical for the vast majority of European countries, including Ukraine and other post-socialist states. It is based on a combination of state administration and local self-government. It is characterised by accountability and subordination (Udovychenko). Also, one of the most important principles of organisation and operation of municipalities in the continental model of governance is their subordination and control to the local population (Mironova, 2011, p. 79), which allows the latter to effectively defend and implement their rights and interests at the local level. In the countries that follow the French model of local self-government, administrative supervision is usually carried out by government officials (prefects). For example, in France, according to part 3 of Article 133 of the Constitution, the prefect is appointed by the Council. According to Article 72 of the French Constitution, "The communes, departments, and overseas territories are the local collectivities of the Republic. All other local communities are established Baltic Journal of Economic Studies 223 Vol. 10 No. 4, 2024 by law. These collectivities are freely governed by elected councils under the conditions determined by law. Government representatives in the departments and territories are responsible for national interests, administrative control and compliance with the laws’ of the ministers." (Serohin, Kolomiiets, Martselia, 2009, p. 49-50) During the last quarter of the twentieth century, local governments in France gained more autonomy in terms of resources and legitimacy. More opportunities were given to local authorities. The Constitution of the Republic of Poland defines the following principles of local self-government functioning: 1) observance of the rights clearly defined by the state (independence of activity); 2) support for the functioning of the unitary structure of the state; 3) election of local self-government; 4) collegiality of the main local self-government bodies; 5) financial independence. For example, local self-government in Poland has clearly defined by law sources of funding that are used only for a specific purpose. In addition, Article 165 of the Polish Constitution provides for the possibility of judicial protection of violations of the rights and freedoms of local self-government (The Constitution of the Republic of Poland, 2018). Local self-government in Germany is one of the examples of the French (continental) system of local self-government in a country with a federal structure. The main unit of the political and territorial organisation of the Länder in Germany is the municipalities. Associations within the scope of their activities established by law also have the right to self- government. The political-territorial structure of the lands in this state is based on the autonomy of municipalities, including their financial autonomy. The municipalities may also establish associations within their competence (Fedorenko, Chernezhenko, 2015). Representative bodies in Germany can have different names: 1) municipal council, 2) city council, 3) municipal assembly. Such bodies are local legislators. They are empowered to resolve specific issues of importance to a particular territory; adopt municipal statutes and resolutions that regulate the main legal issues of local policy organisation; and create conditions for public support of the actions and decisions of the self-government body ( Janet Shayan, Sabine Guillet, 2010). Obviously, this model has its own peculiarities in different countries, due to different historical conditions of development and different approaches to "determining the territorial basis of local self- government, different interpretations of the role of natural and artificial administrative-territorial units in determining the system of territorial organisation of power" (Udovychenko). However, in general, the essence of the understanding of local self-government based on the continental (French) model is that local self-government is seen as a local public authority established by the state, endowed with a certain degree of independence, but at the same time subordinated and controlled by the state as a whole, and, accordingly, by the state executive authorities, with which local self-government bodies must interact within the framework established by law. And in the process of such interaction, certain difficulties and inconsistencies may, inevitably, arise. 3. Problems and Features of Interaction between State Executive Authorities and Local Governments in Ukraine and the EU It should be noted that in recent years, Ukraine has seen a positive trend in reforming the local government system. However, despite this, there is still a certain lack of clarity in the delineation and distribution of powers, a lack of clear division of responsibilities, and an effective mechanism for interaction between local governments of different levels and the representative and executive branches of government. This applies, in particular, to the scope of delegated powers, as well as to issues of personnel, financial, material support, etc. L. Bondarchuk and V. Urbanovich note that "close cooperation between local state and self-governing bodies, as a rule, brings positive consequences, as a result of which state authorities provide the conditions necessary for the normal operation of local self-government bodies, and self-governing structures perform many functions of a purely state nature" (Bondarchuk, Urbanovich, 2015, р. 7). As O. Cherkas notes on this issue, the concept of "interaction" is significantly different from such terms as "partnership" (which is a form of organising mutually beneficial activities of subjects on the basis of pooling resources and joint management) and "cooperation" (which is established through joint practical and spiritual activities) (Cherkas, 2020, р. 228). Rather, the interaction is based on the exchange of information, control and mutual assistance (Mishchuk, 2023, p. 19), which, in principle, can be observed in the case of such interaction between state and local authorities in Ukraine. According to I. Lytvyn, the main principles of interaction between local self-government bodies and local state administrations are "separation of subjects of jurisdiction depending on the legal nature of the public administration body; mutual delegation of powers; fixation of the independence of each body through legislative consolidation; possibility of judicial settlement of disputes and disagreements arising in the exercise of powers" (Lytvyn, 2007, p. 10). With this approach, one can indeed speak of a certain level of interaction. However, it should be noted that in the course of cooperation between state executive Baltic Journal of Economic Studies 224 Vol. 10 No. 4, 2024 authorities and local self-government bodies, an integral component of interaction should be the establishment of special bodies on a parity basis to implement joint programmes and projects, as well as coordination meetings with the participation of heads and officials of the relevant bodies (Zhuravel’, 2018, р. 127). The main reason for the problems that arise in the relations between local state administrations and local self-government bodies is a certain imperfection of the current legislation of Ukraine, which is clearly demonstrated by the analysis of the provisions of the Law of Ukraine "On Local Self-Government in Ukraine" of 21.05.1997 and the Law of Ukraine "On Local State Administrations" of 09.04.1999. For example, Article 14 of the Law of Ukraine "On Local State Administrations" provides for the possibility for local state administrations to exercise the powers of other bodies, including local self- government bodies. This issue is not further regulated by this Law (The Law of Ukraine "On Local State Administrations", 1999). The powers of local state administrations include the following: 1) ensuring the rule of law, protection of the rights, freedoms and legitimate interests of citizens; 2) socio-economic development of the respective territories; 3) budget, finance and accounting; 4) property management, privatisation, promotion of entrepreneurship and implementation of state regulatory policy; 5) industry, agriculture, construction, transport and communications; 6) science, education, culture, healthcare, physical culture and sports, family, women, youth and children, strengthening of Ukrainian national and civic identity; 7) use of land, natural resources, environmental protection; 8) foreign economic activity; 9) defence work, mobilisation preparation, mobilisation and demobilisation; 10) social protection, employment, labour and wages; 11) implementation of the state regional policy and development of international territorial cooperation (Article 13 of the Law of Ukraine "On Local State Administrations") (The Law of Ukraine "On Local State Administrations", 1999). The executive bodies of village, settlement and city councils have approximately the same range of powers, as stated in Chapter II of the Law of Ukraine "On Local Self-Government in Ukraine". There is a certain similarity between the functions of local state administrations and local self-government bodies in the areas of budget and finance, as well as socio- economic and cultural development. Therefore, there is a need for a clear delineation of powers between executive authorities and local self-government bodies and for improving the interaction between local state administrations and local self-government bodies. At the same time, the distribution of powers of local state administrations and local self-government bodies, including delegated powers, should be based on the following principles: 1) the rule of law; 2) a rational combination of state, regional and local interests; 3) sufficient economic and social decentralisation; 4) maximum observance and realisation of the rights, freedoms and legitimate interests of individuals and legal entities within a particular hromada (Karabin, 2006, р. 87). In addition, local state administrations (within the limits set by the Constitution and laws of Ukraine) exercise state control over the following on the territories of their respective communities: preservation and rational use of state property; financial discipline, accounting and reporting; fulfilment of state contracts and obligations to the budget; and proper and timely compensation for damage caused to the state; use and protection of forests, subsoil, water, air, flora and fauna and other natural resources; protection of historical and cultural monuments, preservation of housing stock; compliance with sanitary and veterinary rules, collection, disposal and burial of industrial, household and other waste, compliance with landscaping rules; compliance with trade, household, transport and public utility rules, and consumer protection legislation; observance of legislation on science, language, advertising, education, culture, healthcare, maternity and childhood, family, youth and children, social protection, physical culture and sports; labour protection and timely and not lower than the minimum wage determined by the state; observance of public safety and order, rules of technical operation of transport and road traffic; compliance with the legislation on state secrets and information; adherence to the legislation on the National Archival Fund and archival institutions; compliance with contractual obligations by developers whose activities involve raising funds from individuals for the construction of multi-apartment residential buildings; implementation of engineering and technical measures of civil protection (civil defence) during the construction of buildings, structures, placement of other economic facilities, engineering and transport communications; condition of protective structures of civil protection (civil defence) (Article 16 of the Law of Ukraine "On Local State Administrations", 1999). Such control should not lead to the interference of state authorities or their officials in the sphere of exclusive competence of the local self-government body. This should only be an observation of the latter's activities in order to obtain objective and reliable information on the state of legality of their implementation, as well as to take preventive measures to prevent and eliminate violations of law and discipline within the relevant hromada. In other words, the main area of interaction between state authorities and local self-government bodies should be their joint activities (within the limits of their statutory competence) aimed at exercising their Baltic Journal of Economic Studies 225 Vol. 10 No. 4, 2024 powers and exercising effective control over the observance of the rule of law, human and civil rights and freedoms. However, in practice, the implementation of such cooperation faces certain objective difficulties. In accordance with the Constitution of Ukraine and the provisions of the Law of Ukraine "On Local State Administrations", it is possible to delegate the powers of local state administrations to executive committees of village, town and city councils, as well as regional and district councils to regional and district state administrations. The legislation of Ukraine establishes the grounds, procedure and limits of such delegation, as well as other forms of interaction between local state administrations and local self-government bodies. It also provides for the delegation of local self-government powers to local state administrations by the relevant councils. At the same time, the delegation of powers of other bodies to local state administrations is accompanied by the transfer of appropriate financial, logistical and other resources necessary for the exercise of these powers (Article 13 of the Law of Ukraine "On Local State Administrations", 1999). As noted by the first vice-president, executive director of the Association of Local Self- Government Bodies of Kharkiv Oblast, deputy of the regional council of the fifth-seventh convocations, M. Titov: "The state, when defining the rules of the game, must provide both mechanisms and resources to implement these rules. This is especially important in the relationship between the state and local self- government. After all, decentralisation of power is not only the transfer of additional powers (and therefore responsibility) to local governments, but also the transfer of financial resources for their implementation." (Titov, 2021) There are significant difficulties in the process of such transfer of powers. For example, the state has recently been transferring its powers to local self- government in the respective hromadas, in particular: in the field of healthcare and medical services; maintenance of educational, cultural, and sports institutions; civil defence and fire safety facilities, etc. At the same time, there is no regulatory act that would calculate the total financial need of local governments to ensure the fulfilment of such powers. In addition, local councils also have their own powers (road repairs, street lighting, water supply, etc.). At the same time, the scope of powers of all local councils is the same, but the level of capacity of hromadas is different. Therefore, such a transfer of powers and responsibilities to local self-government violates the provisions of Article 143 of the Constitution of Ukraine, according to which the state finances the exercise of powers of local self-government bodies, which are granted certain powers of executive authorities by law, in full at the expense of the State Budget of Ukraine or by transferring certain national taxes to the local budget in accordance with the procedure established by law, transfers relevant state property to local self-government bodies (The Constitution of Ukraine, 1996). The boundaries and procedure for exercising the functions and powers of local authorities and the procedure for cooperation between the state and local authorities are available in almost all democratic, rule-of-law states. This also applies to EU countries. It should be noted that the legislation of European countries provides for the maximum separation of the spheres of competence of the state, and, accordingly, its executive power, on the one hand, and local self- government, on the other. Local administrations are mainly empowered to deal with issues that fall within the competence of the state. Local governments are subordinated to the main executive body or ministries (Makarov, Derzhaliuk, Kaplan, 2011, p. 27). In EU countries, the continental model of local self-government prevails, with the peculiarity that state and local authorities harmoniously complement each other in various spheres of municipal life. It is characterised by an optimal combination of local self-government and local administrations, i.e., local government bodies. For example, the distinctive features of French governance are that this country uses new approaches to the organisation of local government, the powers of local authorities and the autonomy of local authorities (Hrobova, 2015). In fact, local self-government in France is under governmental, administrative and financial care. In this country, the commune mayor is both the head of the executive branch of local self-government and a representative of the state. In Germany, the heads of districts (Landrat) in the 3 federal states are simultaneously the heads of local administrations representing the state governments at the local level and of representative authorities. By the same token, in Hungary, the government can entrust the mayor, secretary or chief of staff of the municipal representative body with the functions of the head of administration at the local level (Makarov, Derzhaliuk, Kaplan, 2011, p. 27). That is, on the one hand, local self- government is granted a certain degree of independence, while on the other hand, the state is able to more effectively control the legality of the activities of the relevant local administrations. In the Republic of Poland, the fundamental basis of the decentralisation reform, as in many European countries, was the provisions of the European Charter of Local Self-Government (1997). Among the positive aspects of this reform, which can also be considered from the point of view of Ukraine's borrowing capacity, is the elimination of a significant number of reform management centres created under the previous government: the President of Ukraine, the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, and the Ministry of Community Development, Baltic Journal of Economic Studies 226 Vol. 10 No. 4, 2024 which hardly cooperate with each other, slowing down the decentralisation process and complicating cooperation between local state administrations, raion and oblast councils. It also means moving away from the idea of voluntary formation of hromadas in Ukraine. There should be clear state control in this area. Obviously, the system of local self-government and interaction between state executive authorities and local self-government bodies in each country has its own peculiarities (depending on historical, geographical and other factors), as well as its positive factors or shortcomings. According to Romanian legislation, prefects (who head counties) have the right to appeal against decisions of local governments. They are also responsible for the management of decentralised services of ministries and other central bodies in their respective administrative units (The Constitution of Romania, 2003). In Spain, there are no local administrations at all. The activities of the autonomous associations are controlled by the relevant state bodies – each, so to speak, in its own field (Peculiarities of Executive Power and Local Self-Government in the Capitals of the EU Member States. https://infocenter.rada.gov.ua/ uploads/documents/29009.pdf). In the Czech Republic, local administrations have appeal functions. They have the right to consider citizens' complaints against the actions of local governments. In Bulgaria, there are no local self- government bodies at the levels where local state administrations operate. In Finland, at the regional level, there may be associations of municipalities to which local governments have the right to delegate powers in health and social care, as well as vocational education, water and electricity supply (Makarov, Derzhaliuk, Kaplan, 2011, pp. 28-30). Thus, according to the continental (French) model of local self-government, public administration (central and territorial) and local self-government bodies are closely interconnected in their interaction. This model is based on the principle of decentralisation of power, which is one of the factors in the establishment of democratic governance. Such decentralisation can be vertical, when all powers to represent the interests of the central government are transferred to one official, or horizontal, when there are several centres of power at the local level, and responsibilities are distributed according to the sectoral principle and deconcentration (the performance of public services and responsibility for their implementation are assigned to local governments, but the main powers remain with higher government bodies) (Ievtushenko, 2014, p. 99). In contrast to decentralisation of state power, its "centralisation" is "a form of organisation of public administration in which most of the powers are concentrated in a single centre, and the management system is a vertical structure built on the basis of subordination" (Malynovskyi, 2005, р. 218). Centralisation of power in public administration actually ensures an organisational process in the functioning of public authorities – it directs the activities of public authorities towards the implementation of a single state policy, which, on the other hand, leaves little room for administrative- territorial units (oblast, raion, city, raion in a city, town, village) to effectively pursue their interests. Decentralisation, in turn, increases the degree of public participation in making management decisions that directly affect their lives. Decisions made in the context of decentralisation are more responsive to the needs of citizens, as they take into account local conditions, problems and peculiarities. The directions of implementation of centralisation (which is inherent in Ukraine), decentralisation and deconcentration processes in the continental model of territorial organisation of power can be represented schematically, Figure 1. In any case, when implementing cooperation between state executive authorities and local self- government bodies, the most important thing is to find a balance – an optimal combination of functions, rights and responsibilities. Therefore, based on foreign experience and analysis of domestic legislation, the following are the ways to overcome the problems of interaction between the branches of power in the state: the need for a certain level of autonomy of local authorities in the way they exercise their powers; a clear separation of functions of local state administrations and local self-government bodies; legislative regulation of regular close cooperation between the government and local self-government bodies; introduce effective mechanisms for coordinating decisions of central and local executive authorities; resolve the problem of delegating executive powers to local self-government; create a mechanism for effective state control over the legality of the exercise of powers by local self-government bodies. 4. Conclusions The article examines the state policy on interaction between state executive authorities and local self- government bodies in Ukraine, as well as the mechanism of such interaction. The author describes the current state of the regulatory framework in this area and the problems of legislative support for the interaction of state authorities and local self- government bodies and the distribution of powers between them. Ways to improve them are identified. The paper analyses the leading provisions of local self-government in the EU countries and the Baltic Journal of Economic Studies 227 Vol. 10 No. 4, 2024 possibilities of their application in Ukraine. It is concluded that local self-government is one of the most effective instruments of democracy, which is necessary for Ukraine as a country with a European development orientation. The study substantiates the need to reform the system of interaction between local state administrations and local self-government bodies. The research identifies the main ways to overcome the problems of interaction between the branches of power in the State. References: The Constitution of Ukraine. 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