Based on a critical and contextual analysis of modern interpretations of related categories to the category of «budget efficiency» in the financial and economic literature, as well as as a result of convergence of the concept of budget efficiency and efficiency, the definition of «budget efficiency» is improved. territory, which synthesizes and reflects the result of the achieved level of efficiency and transparency of the activities of territorial authorities (local governments) for the formation, distribution and use of budget funds for socio-ecological and economic purposes of strategic and tactical nature. The key essential aspects of budget efficiency of the territory (financial and economic aspect; organizational and managerial aspect; macroeconomic aspect) are substantiated, which form the conceptual bases of the researched problems and determine its theoretical, methodical and instrumental-organizational concept. The main financial and economic, organizational, managerial and macroeconomic conditions of budget efficiency, as well as objective and subjective factors influencing the level of budget efficiency of the territory are systematized. It is substantiated that there are different scientific approaches to the interpretation of the concept of decentralization, which is considered by scientists as: division of rights; distribution of functions and powers; special legal regime; redistribution of responsibilities between levels of government; management system; transfer of power and responsibility; the process of expanding and strengthening the rights and powers of administrative-territorial units or lower-level bodies with a decrease in the competence of the relevant center, etc. On this basis, the paper proposes a definition of «decentralization», which means the process of redistribution of power, competencies and resources from central government to local government and self-government. The paper systematizes the risks of decentralization and the challenges posed by this process from the standpoint of budget efficiency of the territories, the basic of which are determined: the level of professionalism of management, resources for functioning, the nature of cooperation with the higher level system. The functional dependence of the level of budget efficiency of territories on the factors of influence that arose due to decentralization in three key aspects: financial, administrative-territorial and political is substantiated. A system strategy of vector guidelines of financial management in the conditions of decentralization is developed, based on the formation of strategic guidelines of budget architecture, works through the components of efficiency, principles, tasks and imperatives of continuous improvement of financial management through Kaizen technology of structural synergy of budget efficiency. The study of multiplier effects of capitalization of budget potential of territories allowed to determine that the greatest impact on gross regional product as a result of budget efficiency of territories in decentralization have tax and non-tax revenues, budget expenditures, including transfers to the state budget and average per capita income. Taking into account the forecasts of these indicators and tools for their improvement will increase the pace of economic development and ensure the budget efficiency of the territories. A system of defining tools for improving the budget efficiency of territorial development has been developed, which includes a number of important blocks, including: the block of revenues, the block of expenditures, the block of interbudgetary relations. It is substantiated that the directions of ensuring budgetary efficiency of development of territories through improvement of a revenue component of the budget lie in the plane, first, expansion of financial independence of local budgets, secondly, increase of economic potential and maintenance of investment attractiveness of territories, thirdly, attraction of external borrowings for realization. important tasks and projects. It is established that the optimization of the system of inter-budgetary relations is based on the following basic elements: a clear division of powers between public authorities and local governments; improvement of the transfer method of income equalization; improvement of formula calculations of basic and reverse subsidy. The developed proposals to improve the budget policy in the field of revenues, expenditures and inter-budgetary relations will eliminate a number of destructive factors hindering the reform of financial decentralization and will increase the financial self-sufficiency of local governments, and thus allow budget policy to become an effective tool for socio-economic. Key words: budget efficiency, decentralization, territories, capitalization, financial management of territories.
