WHAT HAS CHANGED IN THE COMMUNITIES OF ARMENIA AFTER THE ENLARGEMENT? AN ANALYSIS OF COMMUNITY EXPENDITURES AND REVENUES

The purpose of the research is to assess the impact of the administrative and territorial restructuring in the Republic of Armenia, (particularly, the amalgamation), upon the revenues and expenditures of the municipal budgets, as well as its impact on the changes in the level of dependence on the state budget. The outcomes of statistical data analysis, comparison analysis, combination analysis, as well as inductive and deductive approaches to the analysis throughout a ten-year period indicate that after the amalgamation, there was a decline in the indicator of income decentralisation, attributed to the increased dependence of the amalgamated communities on the state budget allocations. As a consequence, after the amalgamation, the share of capital expenditures designated for the road construction and construction of pre-school education institutions have increased in the total expenditures of the communities. Nevertheless, the increase in the share of capital expenditures in the amalgamated communities and the implementation of subvention programmes was carried out at the expense of the increasing dependence on the state budget, which undermines the principle of the provision of financial autonomy as defined by the concept of community amalgamation