Baltic Journal of Economic Studies 287 Vol. 11 No. 1, 2025 This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 1 Odesa Polytechnic National University, Ukraine (corresponding author) E-mail: 3cypras@gmail.com ORCID: https://orcid.org/0000-0002-2762-1021 2 State University of Intelligent Technologies and Telecommunications, Ukraine E-mail: taraandr2015@gmail.com ORCID: https://orcid.org/0000-0002-1968-4858 DOI: https://doi.org/10.30525/2256-0742/2025-11-1-287-292 THE ROLE OF LOCAL AUTHORITY IN THE FUNDING AND ADMINISTRATIVE-LEGAL PROTECTION OF CULTURAL HERITAGE Andrii Falkovskyi1, Andrii Tarasov2 Abstract. The preservation of cultural heritage is a primary area of activity for local authorities, as territorial communities (hromadas) are responsible for financing, administering, and legally protecting historical and cultural sites.This article explores the main aspects of funding cultural heritage preservation at the local community level, identifying funding sources, budget planning mechanisms, and the challenges municipalities face in implementing protective measures. The article goes on to consider in particular budgetary financing, grant support, public- private partnerships, and patronage as mechanisms for attracting funds for the restoration and conservation of historical sites. The article furthermore examines the administrative and legal mechanisms for protecting cultural heritage, including legal regulations, control procedures, sanction mechanisms, and organisational measures. An analysis of the current Ukrainian legislation in the field of cultural heritage protection allows for the identification of its strengths and weaknesses and the outlining of ways to improve legal regulation at the local level. Special attention is given to the issues of ineffective monitoring of cultural heritage sites, weak institutional capacity of local authorities, and the lack of adequate control over compliance with preservation regimes. The study demonstrates that effective management in the context of cultural heritage protection necessitates a comprehensive approach, encompassing financial support, explicit legal regulation, active collaboration between local authorities, the public, and businesses, in addition to the implementation of international heritage protection standards. The measures proposed in the article are designed to enhance the effectiveness of local authorities in cultural heritage preservation, including augmented funding, enhanced monitoring and control systems, and the engagement of community initiatives and international resources. The findings of this study can be used to develop cultural heritage preservation strategies at the local community level and improve legislation in the field of historical and cultural site protection. The conclusions confirm the need for an integrated approach that combines economic, legal, and administrative measures to establish an effective system for protecting cultural heritage in the context of decentralisation and growing contemporary challenges. Keywords: local authority, cultural heritage funding, administrative and legal protection, cultural monument preservation, legal regulation, public-private partnership, restoration, international standards, tourism potential, decentralisation. JEL Classification: H70, Z30, Z10 1. Introduction The preservation of cultural heritage is an integral part of national policies on national identity, historical memory and social development. Cultural heritage, which includes both tangible and intangible assets, forms the historical context of a country's development, maintains links between generations and contributes to the socio-economic growth of regions. At the same time, their protection and promotion requires not only state intervention, but also the active participation of local authorities. Local authorities play a key role in the funding and legal protection of cultural heritage, as they work directly with communities, implement national policies at the local level, and can respond quickly to threats of destruction or deterioration of cultural monuments. Baltic Journal of Economic Studies 288 Vol. 11 No. 1, 2025 In the context of decentralisation and the concomitant expansion of the powers of territorial communities (hromadas), the issue of financing the preservation of cultural heritage has become of particular importance. Despite the existence of legal regulations defining mechanisms for protecting cultural monuments, in practice, local authorities face numerous challenges, including insufficient financial resources, a lack of clear administrative control mechanisms over the condition of heritage sites, and limited tools for attracting investments and grant funding. Moreover, many communities underestimate the economic potential of cultural heritage sites as resources for tourism development and local entrepreneurship. The necessity for this study arises from the requirement for a thorough examination of the function of local authorities in the financing and preservation of cultural heritage within the context of contemporary legal and administrative mechanisms. Given that financial support for such sites is predominantly reliant on local budgets, it is imperative to ascertain optimal co-financing models that integrate state, municipal, and private resources. Furthermore, the effective administrative and legal protection of cultural heritage requires improvements in control mechanisms, ensuring proper supervision of compliance with preservation regimes, and creating incentives for citizens and businesses to maintain historical monuments. The objective of the present article is twofold: firstly, to analyse the key aspects of local authorities' involvement in financing and administratively protecting cultural heritage; and secondly, to identify the main problems in this area and find solutions. The research is based on the application of general scientific and specialised legal methods, including analysis and synthesis, historical-legal methods, comparative analysis of legislation, and case studies in cultural heritage protection. Given modern trends in heritage conservation, particular attention will be paid to public-private partnership tools, the incorporation of international experience and the introduction of innovative approaches to heritage management (Fairclough, 2006). The study of these issues will help to assess the effectiveness of existing mechanisms and formulate recommendations for improving local authority policies on heritage conservation. 2. Historical and Legal Aspects of the Role of Local Authority in Cultural Heritage Preservation The history of local authority involvement in heritage conservation goes back to the days when communities independently protected historical monuments, sacred sites and architectural ensembles. In many European countries, the preservation of cultural heritage has always been an essential function of local authorities, as these objects shape regional identities, promote cultural development and contribute to economic growth through tourism and creative industries. Historically, the preservation of cultural heritage has been a shared responsibility between central and local governments. While the earliest cultural protection legislation was enacted at the national level, its implementation was largely dependent on local government. In the 19th and 20th centuries, European legal traditions increasingly recognised the role of local governments in heritage conservation (Harrison, 2006). This shift allowed for greater regional autonomy in the management of historic sites, including the ability to regulate construction near heritage sites and to enforce conservation policies. In Ukraine, local authorities have played an important role in heritage conservation since the Soviet era, when the state mandated municipalities to oversee cultural monuments. However, this role has historically been constrained by centralised government structures. Post-independence decentralisation reforms have given local authorities greater powers in the field of cultural preservation, but financial and administrative challenges continue to hamper their effectiveness. Current legal regulations governing cultural heritage protection in Ukraine include: – The Law of Ukraine "On Protection of Cultural Heritage" (2000), which establishes the legal principles of heritage conservation and delineates the responsibilities of local authorities. – The Law of Ukraine "On Local Authority in Ukraine" (1997), which outlines the jurisdiction of municipal governments in overseeing and maintaining cultural heritage sites. – The UNESCO Convention on the Protection of the World Cultural and Natural Heritage (1972), which requires Ukraine to align its national policies with international heritage protection standards. At the municipal level, these legal provisions are implemented through local heritage conservation programmes and specialised administrative bodies responsible for monitoring the condition of historic sites. However, enforcement remains uneven due to financial constraints and institutional weaknesses. Key administrative mechanisms for the protection of cultural heritage: 1. Registration and documentation of cultural heritage sites. A fundamental administrative tool for the protection of heritage is the maintenance of a registry of local cultural heritage sites. The onus is on local authorities to identify, document and register objects in the State Register of Immovable Baltic Journal of Economic Studies 289 Vol. 11 No. 1, 2025 Monuments of Ukraine. However, this process often faces challenges due to a lack of specialised professionals and the limited institutional capacity of communities. 2. Monitoring the condition of cultural heritage objects. Local authorities conduct regular inspections to assess the physical condition of cultural sites, ensure compliance with conservation laws and enforce heritage protection regulations. In practice, however, these monitoring mechanisms are often ineffective due to insufficient funding and a lack of specialised personnel. 3. Restrictions on unauthorised construction and reconstruction. One of the main threats to heritage conservation is illegal construction on heritage sites or unauthorised alterations. Local authorities have the power to grant construction permits only if heritage protection standards are met, and can stop unauthorised construction. In some cases, however, local authorities come under pressure from developers, resulting in violations of heritage protection laws. 4. Sanctions for violating the rules of cultural heritage protection. In accordance with Ukrainian legislation, local authorities are empowered to impose administrative fines for violations such as the illegal demolition of historic buildings, unauthorised construction, and non-compliance with restoration norms. However, in practice, the severity of penalties is often inadequate to serve as an effective deterrent, thereby weakening the enforcement mechanisms. 5. Public awareness and community engagement in heritage protection. Local authorities play a crucial role in raising awareness of the importance of heritage conservation. Organising educational events, developing local tourist routes and supporting initiatives by civil society organisations help to raise public awareness and attract additional resources for the protection of historic sites. Challenges and prospects for strengthening legal protection mechanisms: Despite a well-developed legal framework, administrative mechanisms for protecting cultural heritage in Ukraine remain inefficient. The primary challenges include the following. – Inadequate funding for local heritage protection programs, making it difficult to conduct proper restoration efforts. – The absence of a unified digital database of cultural heritage objects, complicating control and monitoring processes. – Weak institutional capacity of local authorities, expressed in a shortage of trained personnel capable of implementing heritage protection policies. – Lack of effective public oversight, leading to neglect and poor management of cultural heritage sites. To enhance administrative and legal mechanisms for cultural heritage protection, it is necessary to: 1. Strengthen enforcement of existing legislation by improving monitoring tools and introducing digital heritage databases. 2. Introduce more effective penalties for violations, increasing fines and reinforcing criminal liability for the destruction of heritage sites. 3. Expand the powers of local authorities, granting them more decision-making capabilities in managing historical and cultural properties. 4. Encourage greater public involvement in heritage protection, fostering conditions for active participation from volunteers and non-governmental organisations. 5. Develop international co-operation in cultural heritage preservation, exchanging best practices with EU countries. Consequently, an efficacious administrative and legal system for the protection of cultural heritage must be founded upon a comprehensive approach that integrates clear legal regulations, transparent monitoring mechanisms, and active community engagement in the safeguarding of cultural values. 3. Funding of Cultural Heritage Preservation by Local Authority Financing the preservation and development of cultural heritage is one of the key responsibilities of local authorities, as local communities are directly responsible for the maintenance of historical and cultural sites. As most heritage sites are located within local communities, local authorities have the primary responsibility for funding their protection, restoration and proper maintenance. However, the financial resources allocated for these purposes are often insufficient, requiring the search for additional sources of funding and the implementation of effective economic mechanisms. Sources of funding for the preservation of cultural heritage: In Ukraine, measures to protect cultural heritage are funded from several key sources. 1. State budget. The central government provides funding for national heritage programmes through the Ministry of Culture and Information Policy of Ukraine. Funds are allocated for the restoration of sites of national significance and to fund state heritage protection programmes. However, this mechanism is limited as a significant proportion of cultural monuments are under the jurisdiction of local communities and their maintenance is not always covered by state funding. 2. Local budgets. The majority of measures employed for the preservation of cultural heritage are financed from municipal budgets. According to Ukrainian legislation, local authority bodies are authorised to allocate funds for the protection of heritage in their respective budgets. However, due to Baltic Journal of Economic Studies 290 Vol. 11 No. 1, 2025 budget deficits, many communities are compelled to choose between the financing of cultural heritage and the addressing of other pressing socio-economic needs. 3. Special funds and targeted programs. At the regional level, special funds can be set up to finance heritage conservation efforts. These funds are made up of local taxes, fees and charitable contributions. Some cities have introduced tourist taxes, part of which is earmarked for the maintenance of historic sites. 4. Grant programs and international financial organisations. Grants from international organisations such as UNESCO, the European Union (Creative Europe and Horizon Europe programmes) and the Heritage Fund provide additional financial resources for restoration projects and infrastructure development around heritage sites. Local communities can apply for these grants to attract external funding for conservation work. 5. Public-private partnerships (PPP). One of the most promising mechanisms for funding heritage conservation is co-operation between local authorities and the private sector. PPPs allow private investors to help finance heritage restoration in exchange for tax incentives or commercial rights to use restored sites. Successful examples of such partnerships include projects to restore historic buildings and reuse them as hotels, museums or cultural centres. 6. Patronage and philanthropy. Individuals and companies play an important role in funding the preservation of cultural heritage through donations and sponsorship. In Ukraine, many historic sites have been restored with the help of patrons, especially in major historic cities and tourist centres. Challenges and barriers to cultural heritage funding: Despite the existence of multiple funding sources, local communities often face significant challenges in securing adequate resources for cultural heritage preservation. – Limited local budgets. Due to financial constraints, heritage conservation is often not prioritised, leading to the neglect and deterioration of many historic sites. – Inefficiencies in budget spending. The lack of strategic planning and transparent mechanisms for allocating funds leads to inefficient use of financial resources. – Insufficient incentives for businesses and private investors. The lack of well-developed tax incentives and government support discourages private investment in heritage conservation. – Weak institutional capacity of communities. Local governments often lack the administrative expertise to prepare quality grant applications and attract international funding. Strategies for improving cultural heritage funding: To enhance the efficiency of cultural heritage preservation funding, local authorities need to improve budget planning mechanisms, introduce innovative financial instruments, and expand co-operation between the public and private sectors. Key areas for improvement include the following. 1. Development of municipal heritage preservation programmes that include funding for the restoration, promotion and sustainable use of cultural sites in tourism and local economic development. 2. Increasing co-financing from the state budget, which will allow communities to access additional financial resources for heritage preservation. 3. Introduction of tax incentives for businesses and philanthropists to encourage private investment in heritage restoration projects. 4. Increasing access to international grant programmes by establishing local expert centres to help communities prepare successful funding applications. 5. Enhancing public-private partnerships, creating attractive conditions for investors to contribute to cultural heritage preservation while ensuring sustainable use of restored sites. The financing of cultural heritage conservation is therefore a complex, multi-level process that requires a comprehensive approach and the active participation of local authorities, the state, businesses and international partners. Optimising financial mechanisms and implementing modern economic tools can significantly improve the condition of cultural heritage sites and their role in the development of local communities. 4. Administrative and Legal Mechanisms for the Protection of Cultural Heritage The administration and legal protection of cultural heritage in Ukraine is governed by a legislative framework and institutional mechanisms, with national and local authorities playing a role in ensuring compliance. The central government establishes preservation policies, but implementation is largely delegated to municipal bodies. Despite the existence of legal provisions for heritage conservation, enforcement remains inconsistent due to a lack of resources and institutional weaknesses. At the municipal level, local authorities are responsible for: – Registration and documentation of cultural heritage sites. This process involves maintaining local registers of historical landmarks, but is often hindered by insufficient funding and a lack of trained professionals. – Condition monitoring of heritage sites. Local authorities conduct periodic inspections, but due to financial constraints, enforcement is weak. Baltic Journal of Economic Studies 291 Vol. 11 No. 1, 2025 – Regulation of construction near cultural heritage sites. Unauthorised construction and abandonment remain ongoing issues as municipalities struggle to enforce land use regulations. Sanctions for breaches of heritage legislation include administrative fines and criminal liability. In practice, however, penalties are rarely imposed and low fines do not act as an effective deterrent. The slow judicial process further complicates enforcement efforts, allowing violations to continue unchecked. To improve the protection of cultural heritage, local authorities need expanded decision-making powers, better funding mechanisms and stronger coordination with national heritage agencies. Improved law enforcement, stricter monitoring protocols and increased public awareness campaigns can contribute to more effective heritage protection strategies. Public awareness and community involvement are also essential for the sustainable protection of cultural heritage. Local initiatives, educational programmes and community-driven projects help to raise awareness of the importance of cultural conservation. By involving civil society, it is possible to promote a more responsible approach to heritage conservation and encourage proactive participation in the protection of historic sites. To address these challenges, reforms should focus on strengthening institutional co-operation between state authorities and local governments, increasing financial support for conservation programmes, and modernising legal instruments to align them with international best practices. Expanding the use of digital technologies, such as geographic information systems (GIS) and online heritage registers, can also play a crucial role in improving the documentation and accessibility of information related to cultural sites. In summary, while Ukraine has developed a legal framework for the protection of cultural heritage, its effectiveness depends largely on proper enforcement, adequate funding and active community involvement. A more structured and transparent administrative system, coupled with technological advances, can contribute to a more sustainable and efficient heritage protection strategy. 5. Conclusions The role of local authorities in the financing and management of cultural heritage is crucial for the preservation of historical and cultural monuments and their integration into the socio-economic development of communities (hromadas). With decentralisation, local authorities have gained increased powers in the field of cultural heritage protection. However, the effectiveness of their activities depends largely on financial resources, the availability of appropriate administrative mechanisms and the level of co-operation with state institutions, civil society organisations and international partners. The study shows that funding for heritage conservation is a multi-source process, including national and local budget allocations, international grants, philanthropic contributions and public-private partnerships. However, financial constraints within local communities, inefficiencies in budget planning and insufficient private sector involvement remain major challenges. Further improvements are needed in fund allocation mechanisms, the introduction of tax incentives for donors and businesses, and the development of dedicated heritage funds at the local level. Administrative and legal mechanisms for the protection of cultural heritage are based on a legal framework that regulates the registration, conservation and use of cultural heritage objects. However, the analysis shows that enforcement and monitoring systems are not always effective in practice. Many communities face problems such as illegal construction, deterioration of historic sites, inadequate monitoring and weak enforcement of heritage protection laws. To address these issues, local authorities need improved monitoring mechanisms, expanded powers, stricter penalties for violations, and greater involvement of civil society in heritage protection. The future development of local authority policies for heritage conservation should focus on several key areas. First, effective financial mechanisms need to be developed, combining budget support, private investment, international grants and public participation. Second, legal protection mechanisms should be improved by streamlining monitoring procedures, enforcing stricter regulations and ensuring transparent decision-making at the local level. Third, co-operation between local authorities, central authorities, academic institutions and civil society organisations needs to be strengthened to ensure effective implementation of cultural heritage policies. Thus, effective preservation of cultural heritage is impossible without adequate financial support, robust administrative and legal mechanisms, and the active involvement of local communities. The development of local authority in this field should be based on the principles of sustainable management, innovative funding approaches and broad public participation in the protection of national cultural assets. 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Available at: https://zakon.rada.gov.ua/laws/show/80731-10 Received on: 17th of January, 2025 Accepted on: 25th of February, 2025 Published on: 26th of March, 2025