1. Introduction One of the conditions for successful political and economic transformation of a country is rebuild- ing its public administration both in the functional and in the spatial aspect (Izdebski, Kulesza, 2004). At the core of any reform of the administrative divi- sion there is always a fundamental reconstruction of the system of public administration. Also important is the fact that the administrative division does not only mean a spatial form of the functioning of public administration institutions. A. Miszczuk (2003) draws attention to a trend changing the essence of the administrative division, which ceases to be merely “administrative power” and takes on the character- istics of “infrastructural power”. The territorial divi- sion is a structure by means of which specific spatial governance in the implementation of public tasks is obtained. It is not only the administration that uses such a division. It has the organizational and Journal of Geography, Politics and Society 2017, 7(2), 87–97 DOI 10.4467/24512249JG.17.019.6635 The reform of admInISTraTIve dIvISIon In UkraIne: ProblemS of TerrITorIal commUnITIeS’ formaTIon In The PolISh-UkraInIan borderland Aleksander Kuczabski (1), Lesia Zastavetska (2), Taras Zastavetskyy (3) (1) Institute of Geography and Regional Research, Pomeranian University in Słupsk, Partyzantów 27, 76-200 Słupsk, Poland, e-mail: aleksander.kuczabski@apsl.edu.pl (corresponding author) (2) Faculty of Geography, Ternopil V. Hnatyuk National Pedagogical University, Kryvonosa 2, 46027 Ternopil, Ukraine, e-mail: zast@ukr.net (3) Faculty of Geography, Ternopil V. Hnatyuk National Pedagogical University, Kryvonosa 2, 46027 Ternopil, Ukraine, e-mail: e-mail: zast@ukr.net citation Kuczabski A., Zastavetska L., Zastavetskyy T., 2017, The reform of administrative division in Ukraine: Problems of territorial com- munities’ formation in the Polish-Ukrainian borderland, Journal of Geography, Politics and Society, 7(2), 87–97. abstract Issues of the administrative division in the broader context of political and administrative reforms connected with democ- ratization and decentralization are considered. Some historical aspects of the administrative division modeling in Ukrainian borderlands are analyzed. Goals, mechanisms and the course of the current reform of administrative division at the local level in the Volyn and Lviv provinces are presented. The specifics of wealthy communities – new administrative units at the local level are outlined. Features of budget decentralization based on the example of comparing the structure of local government revenue are characterized. The problems and threats faced by the organizers at the present stage of reform are revealed, and some solutions to problematic situations in implementation of the new administrative division are proposed. key words administrative division, administrative reform, Ukrainian borderlands. 88 Aleksander Kuczabski, Lesia Zastavetska, Taras Zastavetskyy ordering significance on a much wider political, eco- nomic and social scale (Kaczmarek, 2005). Since gaining its independence by Ukraine in 1991, a rebuilding of the system of the organization of public authority has been taking place there. Simi- larly to other post-Communist countries of Central and Eastern Europe, Ukraine pursues a strategy to transform old, heavily centralized public administra- tion structures towards democratization and decen- tralization. Unlike Poland and other countries in the region, Ukraine’s transition from totalitarianism to democracy is a much longer process. In addition, this process has not yet been completed. The process of democratization of Ukraine is not linear either, and it is characterized by a frequent change in the transfor- mation phases (Michalski, Kuczabski, 2014). Reconstruction of the administrative division in border areas has a particular specificity, due to its impact on the social and economic development of the respective territories. Socio-economic develop- ment of the Ukrainian-Polish borderland is deter- mined by many factors. The border, cutting through a certain area and dividing it into parts different in terms of law, nature and shape of the administration or the intensity of economic activities, is a key ele- ment of this development. The current course of the Polish-Ukrainian border was formed in 1945–1951 as a result of geopolitical aspirations of the totalitarian regime of the USSR. The historical factor in the case of the Ukrainian-Polish borderland is extremely con- ducive to both individual contacts and institutional forms of cross-border cooperation. Disintegration of the USSR and the emergence of independent Ukraine in 1991 did not affect the course of the bor- der, but it changed its nature. Since that time reacti- vation of the pre-war social, economic and cultural ties has begun. The issue of the administrative division of the Ukrainian-Polish borderland should be viewed from different perspectives. Firstly, the administrative di- vision creates a territorial basis for the functioning of bodies and institutions of the public administration. Secondly, it determines the emergence and devel- opment of territorial social systems with a specific territorial identity. Thirdly, it is the spatial form of distribution of funds and designates the territorial nature of public investment. All these aspects more or less significantly influence the nature and the in- tensity of cross-border cooperation. One must also realize that in the case of border- lands one of the key factors shaping cross-border cooperation is the compatibility of the administra- tive division. The compatibility of the administrative division is based on two fundamental elements. The first one reflects the correlation of competence of respective territorial structures of public administra- tion. Maintaining a certain level of such competence correlation is an important condition for entering into, maintaining and developing direct cross-bor- der cooperation. The second element characterizes the parity of the size of territorial units on both sides of the border, which is extremely important in en- suring adequate resources necessary for coopera- tion. This element can be quite widely presented: from the number of the population and the size of the area of the respective administrative units to the amount of their budgets or the costs of the invest- ment made (Kuczabski, 2017). The question of the compatibility of administra- tive divisions in the Ukrainian-Polish borderland was analyzed by in detail A. Kuczabski and A. Miszczuk (2005). The analysis showed a relatively high de- gree of compatibility of these divisions, especially at the regional level (voivodeships and oblasts) and the sub-regional one (poviats and regions). On the Ukrainian side there have been more or less significant changes in this regard. So far they have mainly concerned the shape of the administrative units at the lowest level. A reform of regional units in Ukraine (oblasts and regions) was announced, but for various reasons, suspended. It aims to lead to a further increase in the compatibility of division units in both countries, especially at the local level (municipalities). 2. historical premises of the reform Still in the period of being part of the USSR, the administrative division of Ukraine at the local level was critically evaluated in scientific circles. While in most European countries after World War II, a trend to reduce the number of municipalities dominated, in the Soviet Union, after quite an unsuccessful at- tempt to conduct similar reforms in the late 1950s and 1960s, preservation of the existing administra- tive division at the local level took place. B. Choriew (Хорев, 1981) was a supporter of a broad reduction in local administrative units in the USSR and propa- gated the necessity to consolidate rural councils and give them some of the administrative functions from the level of regions. The characteristic of Ukraine excessive number of administrative units at the local level significantly weakens the local government, which in small towns is unable to fulfil its basic tasks due to a lack of ad- equate financial resources and sufficient assets. Fur- thermore, the maintenance of the old administrative division only resulted in the escalation of imbalance between units of this division (Kuchabsky, 2006). The reform of administrative division in Ukraine: Problems of territorial communities’ formation… 89 For a long time, fierce political debate on the ne- cessity and principles of reconstruction of the sys- tem of public administration in Ukraine did not allow moving on to the relevant changes of the territorial structure of the country. Until 2014, all the chang- es mainly regarded maintaining a certain balance between the central and the local governments, achieved during the constitutional agreement in the mid-1990s. The basic principles and key elements of the administrative regime based on the ideas of self-government of territorial units of Ukraine were included in the Constitution (Конституція України, 1996) and laws (Про місцеве самоврядування..., 1997; Про органи самоорганізації..., 2001). After an unsuccessful attempt to reform the administrative division in 1997, the question of reorganization of the administration several times has become a rea- son for heated political debates. Only after taking over power in Ukraine by pro- European political elites in 2014, did the process of implementation of reforms of the administrative di- vision began, with a view to creating active and ef- fective local governments. 3. Principles of the reform The change of social relations in Ukraine and its transition to market economy requires changes in the administrative-territorial system, which now has become an obstacle for the effective regional policy, and it needs to be reformed. In connection with that, in 2014 the first stage of such a reform began. It en- sures decentralization of power and optimization of powers between the state authorities and the local self-government. Decentralization of power is an im- portant objective, included in the Decrees of the Pres- ident and the Cabinet of Ministers of Ukraine (Про Стратегію сталого розвитку „Україна - 2020”, 2015; Про затвердження Державної стратегії…, 2014; Про схвалення Концепції…, 2014). Its aim is deter- mined by the laws of Ukraine (Про співробітництво територіальних громад, 2014; Про добровільне об’єднання територіальних громад, 2015) as well as other regulations regarding amendments to the Tax and Budget Codes, strengthening the role of lo- cal authorities and self-government. The main objectives of the decentralization poli- cy include moving away from the centralized model of management in the country, ensuring the ability of the local government to build a system of effec- tive territorial organization of the society. Creating viable territorial communities that would provide favorable conditions for living and ensure compre- hensive economic and social development on their territory is the first stage of the decentralization pro- cess in the country. Due to the absence of law on the administrative-territorial system of Ukraine, there is no single approach to the definition of the concept of “territorial community”. The amendment to the law (Про місцеве самоврядування…, 1997) contains the following definition: territorial community – residents, united by permanent residence within the limits of a village, settlement, city as independent administrative-terri- torial units, or a voluntary association of residents of several villages with a single administrative center. According to the present-day regulations, the powers of the territorial community should be ex- panded, and amendments to the Constitution of Ukraine are necessary, because it does not take into account the needs of a modern society. Such powers are determined by Article 143 of the Constitution of Ukraine and involve “management of municipal property; approval of programs of so- cio-economic and cultural development and control of their implementation; approval of the budgets of the respective administrative-territorial units and control of their implementation; carrying out local referendums and implementation of their results; es- tablishment, reorganization and liquidation of mu- nicipal enterprises, organizations and institutions, as well as control over their activities; resolving other problems of local importance, assigned to their juris- diction by law” (Конституція України, 1996). Formation of new territorial communities should be based on the transfer of a wide range of pow- ers to the grassroots level of system management, which is based on the principle of subsidiarity. According to scientists, formation of such com- munities should be aimed at providing citizens with the maximum number of quality services. Preschool and children’s education, basic health care, culture and leisure of the citizens, domestic services (water, electricity, heating and sanitation), land use and en- vironmental protection, transport and communica- tions, etc. will be carried out within the community. Scientists consider common interest to be one of the attributes of the community. The term “territorial interests” means “the dependence between the ne- cessity and the importance of meeting the needs of local community through its direct or indirect activi- ties aimed at ensuring the conditions for the exist- ence and development of this society and a specific region” (Кучабський, 2010, p. 45). In order to imple- ment this interest, it is necessary to ensure a certain resource provision (natural, financial, economic re- sources). The socio-economic potential of the com- munity is one of the preconditions of its partial man- agerial autonomy. Such interest is part of the public 90 Aleksander Kuczabski, Lesia Zastavetska, Taras Zastavetskyy interest but takes into account the local properties of the so-called territorial conscience, similarity of belonging to the territory, the unity of traditions and culture, etc. The local self-government authorities are created on the basis of the territorial community, which together with the government and other enti- ties of the society establish the necessary balance of its interests. The justification for geospatial organization of territorial communities is considered to be an im- portant issue. It is necessary to proceed from the fol- lowing principles (Заставецька, 2013): 1) Settlement-related, i.e. the community area should be based on already existing settlement systems with simultaneous expansion of func- tions; communication between settlements must be taken into account in establishing the boundaries of the communities. 2) Territorial, i.e. the community must cover a com- pact territory, whose all elements have a high level of transport accessibility. 3) Demographic, i.e. taking into account the ten- dencies of population reproduction, the change in its age structure, migration flows. 4) Socio-economic, i.e. the community must en- gage in economic activities with an effective use of local resources; it should sustain people’s daily needs. 5) Self-governing, i.e. representing the community’s interests to ensure their right to self-government. These principles also form the basis of the spatial organization of the local settlement systems, which will be established in the process of the adminis- trative-territorial reform. The voluntary principle should also be added to them; observing this prin- ciple is mandatory in the process of merging settle- ments into a society. In this case the settlements in the community will develop in close relationship with each other. Unlike modern village councils that have low economic potential, insufficiently developed production and social infrastructure, having in their structure several settlements, large territory and population, such communities must ensure the integrated develop- ment of the territory. Optimization of the geospatial organization of the region’s population resettlement will be carried out; new systems of the so-called net- work organization with the extensive development of horizontal braces will be established on their basis. Settlements which will be included in the com- munity will develop according to their place and role in the community. Of course, the greatest so- cio-economic development should be provided for the community centers, i.e. large villages and urban settlements. They should have important industrial and social facilities that will provide the population with jobs and various services. These centers should have good transport links with all the villages of the community and the regional center. They will be kind of „growth poles”, which will become new cent- ers of settlement systems and the sphere of territo- rial administration. Other settlements of the community must also get the social and economic impulse, as they should not become literally „peripheral”. In case of lack of development in non-agricultural activities and low transport accessibility, such villages can become un- inhabited and gradually liquidated. Therefore, villag- es in each community should be developed accord- ing to the established functions and socio-economic potential. Introduction of the cluster model of the territo- rial community will become an additional mecha- nism for improving the system of management in the effective use of investments from the state and local budgets, provided for the demographic devel- opment, financial and social development of rural areas, poverty reduction, education and health of the peasants, living conditions, cultural and public services. The cluster approach to the new geospatial or- ganization of production and resettlement will be- come an important condition for the optimization of the geospatial organization of society, improvement of the efficiency of its management. Thus, the cluster model of territorial communi- ties will be formed due to the increased production, information, social relations between individual set- tlements, and establishment of close managerial contacts. Collaborative work of people to strength- en local economy, attracting resources of the terri- tory to production, and infrastructure development – these are the advantages of the cluster organiza- tion of the population life in the designated area. Because the cluster members do not depend on each other, it gives them an opportunity to use their potential and attract investments according to the designated purpose. Based on voluntary coopera- tion of cluster members and their cooperation with authorities, the effective use of investments from the state and local budgets for the revival of rural areas can be achieved. Transformation of territorial communities into clusters has many advantages, in particular, the ability to provide a certain territory with integrated socio-economic development, the ability to ensure social comfort of the population throughout the same level and quality of life in all the settlements of the territorial community, and the ability to reduce The reform of administrative division in Ukraine: Problems of territorial communities’ formation… 91 disparities between the development of the central and peripheral settlements of the community. This will facilitate the transformation of territorial com- munities into unique clusters and implementation of the cluster model of economic development – such a combination of business organizations that work closely with other institutions and bodies of self-government in a certain area with the purpose of organizing competitiveness and investment at- tractiveness of the economy ensures a high level of the quality of life of the population. The cluster model in terms of innovation-oriented economy will provide the same standards of living in hierarchically different territorial entities. The vast majority of legislative initiatives on public administration reform came from the Gov- ernment of Ukraine, especially the Ministry for Regional Development, Building and Housing of Ukraine structures. The set of projects prepared by the Ministry for Regional Development, Building and Housing of Ukraine played a key role in the issue of territorial management and the reform of the ad- ministrative division (Про співробітництво..., 2014; Про добровільне об’єднання..., 2015). Previously, contrary to the constitutional arrangements, in Ukraine there had been no mechanism for creating local government units by grassroots consolidation. The Bill of 2015 aims, among others, to create legal conditions and strengthen the guarantees of the lo- cal government functioning, to support the devel- opment of functional rural territorial clusters as well as to support a sustainable development and a ra- tional use of budgetary resources (Про добровільне об’єднання..., 2015). The Bill gives cluster residents the right to initiate voluntary mergers of the existing clusters, and the very procedure of merging does not preclude holding a local referendum. In turn, the Bill of 2014 creates a legal foundation for cooperation of local government units (Про співробітництво..., 2014). The existing Ukrainian law provided only a general framework for inter-municipal coopera- tion. The new law classifies cooperation of territorial clusters as a relationship based on relevant agree- ments between two or more clusters to foster socio- economic and cultural development, to improve the quality of public services, and to effectively perform their tasks by the local government authorities. 4. The course of the reform in Ukraine The process of territorial communities’ formation is already taking place in Ukraine. It is carried out according to a specific procedure, according to which high-income territorial communities are the communities of villages (towns and cities), which, as a result of voluntary consolidation, are able indepen- dently or through local governments to provide an adequate level of services, in particular in the field of education, culture, medical care, welfare, housing and public services, taking into account human re- sources, financial support and infrastructural devel- opment of the respective administrative-territorial units (Про затвердження Методики…, 2015). As of the end of December 2016, there were 366 territorial communities in Ukraine (Tab. 1). However, the process of territorial communities’ formation oc- curs uniformly in all the regions. In separate regions (Vinnytsia, Lviv, Khmelnytskyi, etc.) it has almost fin- ished, while in such regions as Kyiv, Luhansk, Kharkiv only 2–4 communities have been established. There are significant differences in the area and population size of such communities in the various regions, and also in the number of their member-settlements. In particular, the largest community by the population size has more than 33,000 inhabitants (Odesa Re- gion). There are several communities with the area of over 1,200 km2 (Donetsk, Zhytomyr, Zaporizhia Region), while in certain regions the area of new territorial communities does not exceed 200  km2 (Kirovohrad, Cherkasy, Chernivtsi Region). Gener- ally, on average, from 5 to 18 settlements in Ukraine are united into communities. The communities, es- tablished in Zhytomyr (65), Poltava (63), Chernihiv (57), and Khmelnytskyi (53) Regions have the larg- est number of settlements. Usually, the union of a large number of settlements into community in- creases the distance between the community set- tlements and the center. Thus, the longest distance is recorded in Zhytomyr (53 km), Rivne (46 km), Donetsk, and Dnipropetrovsk (40-41 km) Regions (Децентралізація влади). Creation of new, much more self-sufficient ad- ministrative units at the local level, known as “capa- ble municipalities” is considered to be the most im- portant element of this reform. The mechanism for the emergence of new clusters was based on decen- tralization of budgets through changes in the finan- cial and tax codes of Ukraine. Changes in the Budget Code mainly regarded simplification of the relation- ship of the new clusters with the central budget. If the new units adhere to Government’s recommen- dations on merging the municipalities, they are given competence and resources which until now only cities at the level of oblasts had (Практичний посібник, 2016). The need for budgetary decen- tralization arises from the dynamics of their revenue in the consolidated budget of Ukraine which has cemented in recent years and which is disadvanta- geous for the empowerment of local government 92 Aleksander Kuczabski, Lesia Zastavetska, Taras Zastavetskyy units (Fig. 1). A decline in the share of own revenues with a simultaneously increasing role of transfers from the central budget indicates inconsistencies in the central authorities’ actions to continue the de- clared policy of decentralization. 5. Implementation of the reform in municipalities of the Ukrainian-Polish borderland A very important role of the central administration in the decision-making process is a characteristic fea- ture of the Ukrainian administrative reform, which can be explained by a strong tradition of authorita- tive political and administrative decision-making, without broad public consultations. “The prospec- tive plan of combining territorial clusters” was con- sidered in the Bill (Про добровільне об’єднання..., 2015) as the basic document setting out the shape of the future territorial administrative units. Draw- ing up such a plan has been foreseen at the level of each region, and it is a task for public administration in particular oblasts. Each prospective plan is then approved by the oblast’s council and, finally, by the Cabinet of Ministers of Ukraine. According to the lat- est plan, in the area of the Lviv Region there should be 85 new clusters. 40 urban clusters (around almost all the cities of the region, apart from Dublana, Sos- nivka, Stebnyk and Uhniv), 21 town clusters and 24 village clusters are expected to be created. It is assumed that the discussed project is not final, as some of the clusters approved in the project do not meet the required parameters. In the Volyn region, as a result of the reform, 52 new clusters should be created. Already in 2015, 5 new clusters were created in the Volyn Region and 15 in the Lviv Region. Statistics Tab. 1. United territorial communities in the regions of Ukraine (1.01.2017) Name of the region Before the reform After the reform total number of councils municipal settlement rural number of united communities prospective plans Cherkasy 556 16 15 524 6 39 Chernihiv 569 16 28 525 16 34 Chernivtsi 271 11 8 252 16 12 Dnipropetrovsk 348 20 40 288 34 48 Donetsk ** 386 52 81 253 6 33 Ivano-Frankivsk 516 15 24 477 11 45 Kharkiv 458 17 60 381 4 51 Kherson 298 9 30 259 12 35 Khmelnytskyi 605 13 24 568 26 23 Kirovohrad 415 12 27 376 5 16 Kyiv 661 26 30 605 2 27 Luhansk ** 194 10 25 159 3 22 Lviv 711 44 34 633 22 71 Mykolaiv 314 10 17 287 19 19 Odesa 490 19 32 439 11 14 Poltava 503 15 21 467 18 28 Rivne 365 11 16 338 18 27 Sumy 411 15 20 376 14 41 Ternopil 615 18 17 580 26 10 Vinnytsia 707 18 28 661 21 20 Volyn 412 11 22 379 15 40 Zakarpattia 337 11 19 307 3 * Zaporizhia 299 14 22 263 16 42 Zhytomyr 631 12 40 579 32 19 * information is not available ** in areas controlled by Ukraine Source: own study according to the information from “Decentralization of power”. The reform of administrative division in Ukraine: Problems of territorial communities’ formation… 93 Fig. 1. The share of revenues of the local governments budgets in the consolidated budget of Ukraine Source: Kuczabski, 2017. Tab. 2. New clusters, created in the Volyn and Lviv Regions in 2015. Centre of the cluster Region Area [km2] Population [thousands] Number of municipalities Babyna Lviv 77.9 4.9 10 Biskovychi Lviv 55.0 6.1 8 Chukva Lviv 76.8 3.6 36 Dublany Lviv 66.5 3.1 7 Hnizdychiv Lviv 57.6 6.5 6 Holoby  Volyn 224.0 8.0 19 Hrabovets’ Lviv 65.9 4.1 6 Luky Lviv 54.7 3.9 7 Mizhenets’ Lviv 8.8 2.4 6 Nove Misto Lviv 18.4 6.3 14 Novi Strilyshcha Lviv 71.9 2.8 11 Novyi Kalyniv Lviv 108.3 7.3 8 Smolyhiv  Volyn 693.2 1.8 6 Trostyanets’ Lviv 190.0 8.1 17 Ustyluh Volyn 43.7 7.6 26 Velyts’k Volyn 211.5 4.1 12 Vil’shanyk Lviv 79.1 3.1 9 Volya-Baranets’ka Lviv 69.4 5.2 15 Zabolottsi Lviv 105.7 2.6 10 Zymne Volyn 175.0 6.2 17 Source: own study based on data: Від прагнень до звершень..., 2016. 94 Aleksander Kuczabski, Lesia Zastavetska, Taras Zastavetskyy of the new clusters revealed a problem with rational selection criteria for their creation. Contrary to the initial intent of the reform propagators, the new clusters very often are little different in terms of terri- tory, population or city from most old clusters. Exam- ples of such far too small clusters include: Smolyhiv (1.8 thousand inhabitants), Mizhenets’ (2.4 thousand inhabitants), Zabolottsi (2.6 thousand inhabitants). In turn, the new collective clusters in some cases combine only 6 towns (Smolyhiv, Hnizdychiv, Miz- henets’, Hrabovets’) (Tab. 2). In the following year new clusters were created. In the Volyn Region clusters were created with seats of the authorities in: Lytovezh, Poromiv, Povors’k, May- aky, Pavlivka, Prylisne, Shats’k, Lyublynets’, Dubove, Zabolottya, and in the Lviv Region, as a result of con- solidation, new clusters were created with seats of the authorities in: Khodoriv, Zhovtantsi, Mostyska, Sudova Vyshnya, Shehyni, Davydiv, Nyzhankovy- chi (Fig.  2). It is worth noting that the dynamics of changes in the administrative division is insufficient, as at this rate of transformations, even in the current, very conducive to the reform conditions, the process of consolidation will stretch on for years. This, in turn, will postpone the next stage of the reform at the subregional (regions) and regional level (oblasts). Fig. 2. Clusters created in Lviv and Volyn regions in the 2015-2016 Source: own study. The reform of administrative division in Ukraine: Problems of territorial communities’ formation… 95 As the government expectations assumed, the decisive incentive to consolidation was based on financial benefits. Adapting to the recommenda- tions of the reform projects on cluster mergers opens access to substantial in the Ukrainian condi- tions resources from the central budget provided for building the local infrastructure. Already in the first 9 months of 2016, such resources in the whole of Ukraine amounted to 667 million UAH. Also new clusters of the borderland have benefited from these resources – in the Volyn region (18 million hryvnia) and in the Lviv region (31 million hryvnia) (Децентралізація..., 2016). Unfortunately, disper- sion of this subsidy to particular cluster, and even more so to municipalities, does not allow, however, for initiating more serious investments of strategic importance. Perhaps improvement in the economic situation of the country will affect more favorably the collection and spending of these funds. As a result of the reforms there have also been considerable changes in the revenue structure of some budgets of the local government units. The share of own revenue increased to 10% in one year, which confirms the trend to empower the local government and gives basis to conclude about the steps taken towards decentralization. However, one may notice significantly lower revenue share of own budgets of new municipalities (29.7% in the Volyn Region and 31.4% in the Lviv Region) in comparison to the corresponding indicator for all clusters (44.8% in the Volyn Region and 56% in the Lviv Region). This proves that at this stage the consolidation actually concerns the weakest units in terms of financial self- sufficiency, since even after the consolidation proce- dures, they are on average poorer than most of the old municipalities. 6. conclusions The reform of administrative division in Ukraine is currently in progress. Implementation of the reform in practice allows reactivating self-government as a basic element of territorial management. This is only the initial stage of a broad political and admin- istrative reform, which should implement the basics of local democracy and duly turn into a decentraliza- tion reform at the regional level. In general, the idea of creating new, strong clusters at the local level in place of the existing small units is conducive to lo- cal development, and hence the development of the whole region of the Ukrainian-Polish border area and activating the cross-border cooperation. What is meant by that is the emergence of a more com- patible administrative division on both sides of the border, both in the sense of competence of local au- thorities and in relation to the size of the territorial units. An additional factor supporting and stimulat- ing such cooperation in the Ukrainian-Polish border- land is the pro-European orientation of the currently ruling political elite in Ukraine. However, the hitherto implementation of the re- form of administrative division in Ukraine, especially the situation in the Polish-Ukrainian borderland revealed a number of serious problems, both with organization of the new system of local authority and with the development of local economy, includ- ing the prospects for cross-border cooperation. The most important issues include, among others: 1) Unfavorable general economic situation in the country caused by warfare in the East, and a con- sistent lack of pro-market reforms. In the long run this may affect the further escalation of dis- parities in standards of living on both sides of the border and undermine the parity in the character of cross-border cooperation. 2) The cabinet nature of the reform translates into a lack of sufficient social acceptance. The acceler- ation in the implementation of the reform over- laps with a consistent lack of information policy on the part of the authorities. Thus the emerg- ing administrative division units do not appear as a result of broad public debate, but they pri- marily arise as a result of compromises between groups of interest of the regional and local level importance. 3) Focusing on the issues of reorganization of rural areas. The main drawback of the hitherto admin- istrative division of Ukraine was a heavy fragmen- tation of the structure of units at the local level. Therefore, the idea of the reform mainly focused on organization of rural areas, which in many cas- es means reshuffling of smaller villages among the newly selected centers of local development. In this way, problems of managing larger towns and agglomerations remain unresolved. 4) Possible intensification in degradation of remote areas. One of the key reasons forcing the central authorities to speed up the reform is an intention to rationalize the cost of maintaining administra- tion and social infrastructure at the local level. Undoubtedly, this will result in liquidation of many unprofitable establishments so far main- tained from the local budgets. This will aggravate the situation in peripheral municipalities, which may lead to the intensification of degradation of such areas. 5) Unfair redistribution of funds from the adminis- trative units lagging behind the reform to new clusters. The mechanism of implementing the 96 Aleksander Kuczabski, Lesia Zastavetska, Taras Zastavetskyy reform was based on a financial instrument. By consolidating into a new structure, units obtain larger subsidies from the state budget. However, such additional resources come from cuts in the consolidated budget for other purposes and es- tablishments. If such cuts will cause a reduction in financial support for units lagging behind the reform, this may lead to a sort of sabotage, and even worse, to consolidating and politicalizing of anti-reform circles. These mentioned problems and a lack of or an in- adequate response to their appearance on the part of the central authorities translates into certain con- cerns about ensuring the implementation of the fundamental objectives or the democratic principles of the reform. Special concern regards: • increasing conflicts within clusters consolidated authoritatively as a result of a lack of a sense of sufficient identity among residents of the new administrative units; • moving away public services from the citizens – increasing the size of clusters will cause a drastic reduction in the availability and accessibility of administrative offices, particularly in conditions of poorly developed means of transport; • reducing peripheral social and cultural infra- structure establishments (schools, medical clin- ics, cultural centers), caused by a natural desire to optimize budgetary costs, but lowering the stan- dards of living in smaller municipalities remote from the new administrative centers; • ignorance of the reform on the part of old clus- ters which do not express a desire to merge with the neighboring units because of various barri- ers (from mental to economic ones), which poses a risk of growing marginalization of entire areas and may result in the need to complete the re- forms in a decretal way; • continued destabilization of local administration functioning through the necessary adjustments and improvements in actually unjustified and hastily approved projects of the administrative division; • abandoning of the reform as a result of a possible change of the ruling political elite in the next elections, also due to errors related to implemen- tation of the administrative reform. The central government should focus on the key challenges to the current stage of the reform caused by reformers’ previous errors. The most important tasks faced by the central and regional authorities include: • encouraging the economic reform towards pro- market economy in order to improve the popula- tion’s quality of life and to create a better financial base for the functioning of local administration; • financial decentralization, leading to an increase in the share of own revenue of municipalities in their budgets and a reduction of counting on support from the central budget; • supporting all initiatives related to the develop- ment of cross-border cooperation to create new opportunities resulting from the benefits of the near-border geographical location (it is crucial to participate in projects which could be subsidized from the European Union funds); • creating a mechanism for flexible adjustments to the boundaries of those new clusters that were formed authoritatively, contrary to the local com- munity’s interests, which should lower the level of distrust among citizens. 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