Inter-municipal cooperation (IMC) is one of the key tools for implementing decentralization reform in Ukraine. It enables communities to use the resources and powers granted to them more effectively, address common challenges, ensure infrastructure development, and improve the quality of services provided to the public. Under martial law, the importance of IMC is growing, as cooperation between communities helps increase resilience, capacity, and the implementation of projects that, for various reasons, cannot be carried out independently. However, despite the positive results, there are significant challenges in the areas of legal regulation, financing, and monitoring of IMC, which necessitates the improvement of legislative and institutional mechanisms. The purpose of this article is to develop institutional proposals aimed at stimulating inter-municipal cooperation as a catalyst for sustainable development at the regional level, to conduct a comprehensive analysis of the current state of application and development of IMC mechanisms in Ukraine, to identify key institutional and financial barriers that hinder the scaling up of cooperation among territorial communities, and to develop recommendations that can be applied by local authorities, regional state administrations, and central government bodies to enhance the effectiveness of IMC and promote the sustainable development of regions. The current state and challenges of intermunicipal cooperation processes in Ukraine have been examined. The current state of intermunicipal cooperation in Ukraine was analyzed, key problems hindering its development were identified, existing institutional mechanisms and their impact on the development of cooperation were examined, and proposals were made to improve the regulatory, legal, and financial framework for intermunicipal cooperation processes in Ukraine. It is noted that to strengthen the role of intermunicipal cooperation, it is necessary to create a modern institutional environment that will ensure the simplification, effectiveness, and financial foundation of community cooperation mechanisms. The proposed institutional solutions can serve as a basis for enhancing the capacity of local communities, reducing development disparities, and formulating long-term strategies for sustainable regional development. 

inter-municipal cooperation, regional development, cooperation, economic capacity, sustainable development 

Under the conditions of the decentralization reform, the budget equalization system in Ukraine underwent significant changes, which took place in terms of the transition from vertical equalization of expenditures to horizontal equalization of revenues. Today, a mixed budget equalization system is being formed in Ukraine, with an emphasis on horizontal equalization of revenues and the use of separate tools for vertical equalization of expenditures. The main problems of budget equalization in Ukraine include the insufficient amount of own revenues of local budgets, the high level of dependence of local budgets on transfers from the state budget, the insufficient justification of the procedure for calculating the tax capacity indicator, the low level of financial autonomy of communities, the lack of a clear division of powers between state authorities and local governments, transfer of powers to the level of local government without adequate financial support, significant differentiation of regions by the level of socio-economic development. The problem of restoring the district level of local government is in a “frozen” state. The budget equalization system of Ukraine should be improved in terms of creating equal financial opportunities for access to public services. In the medium- and long-term perspective, it is advisable to strengthen the role of expenditure equalization tools, supplement the representative tax system with a number of taxes (property tax, single tax, excise duty), create an independent agency for periodic analysis of the state of the budget equalization system and develop proposals for its reform, restore the practice of using agreements on interregional development, agreements on regional development, and programs for overcoming the depressed state of the territory. The new equalization system should be based on state service standards. With the transition to medium-term planning of local budgets, it is necessary to ensure the stability and predictability of the volume of transfers to local authorities and the transparency of the order of their distribution. 

budget equalization, local government, standards of public services, transfers, distribution of powers, differentiation of own revenues 

Principles and approaches to definition of «sustainable development» are analyzed. The role of regions as specialized reprocessing systems in the concept of sustainable development and the factors, which stipulate the necessity of the Ukrainiane regions’ sustainable development, are outlined. The most significant external factors that impede transition to sustainable regional development are identified. Preconditions (priority mechanisms) of the increase of region’s sustainability are defined. Analysis of the well-known methods and systems of indicators for an estimation of sustainable development of socio-economic systems and their components is conducted. Approaches to formation of the method of regional sustainable development estimation are proved. 

sustainable development, region, reprocessing process, model, estimation, indicators