Introduction. Current trends in the growth of demand for public goods at the local level increase the expenditures of local budgets for their financial support. Transformation processes in Ukraine to increase the role of local budgets necessitate a clear distribution of sources of tax revenues between the levels of the budget system in direct proportion to the financing of local budgets and the introduction of an effective mechanism for effective financing of local budgets through ensuring the socio-economic development of regions.The purpose of the research is to substantiate the scientific and practical basis of the role of expenditures of local budgets of Ukraine in ensuring the socio-economic development of regions.Research methods are based on the dialectical method of scientific knowledge and a systematic approach to the study of local budget expenditures of Ukraine in terms of budget decentralization using methods of scientific abstractions and analogies, analysis and synthesis, economic and statistical analysis to study the role of local budget expenditures in ensuring socio-economic development of the regions.Results. The directions of activity of local authorities in the context of regulation of social and economic development of regions are considered and defined. The system of indicators according to which the monitoring of socio-economic development of regions is carried out is researched. Expenditures of local budgets of Ukraine of social orientation and expenditures on economic activity in the context of determining their impact on the socio-economic development of the regions are analyzed. The role of regional target programs as an important means of effective application of program-targeted budgeting is determined. The directions of growth of influence of expenses of local budgets in definition and maintenance of priorities of social and economic development of regions are outlined. Prospects. Further research is important to focus on increasing the efficiency of expenditure of local budgets in the context of ensuring the socio-economic development of the regions.
The extensive use of financial technologies and innovations in the provision and utilization of financial products and services causes new risks that require constant attention. The article aims to improve innovation risk management methods to increase the operational stability of financial institutions in Ukraine. By generalizing international practice, the types of innovation risks are classified, and their impact on the activities of financial institutions and consumers is characterized. The attention is drawn to the control strengthening over the impact of operational and regulatory risks, based on important theoretical provisions contained in WBG, BIS, BCBS, and FSB documents. An organizational scheme for the interaction of a financial institution and an IT company is proposed to conclude “smart contracts” based on the use of a cloud service and blockchain technology. The authors propose additional methods of insurance protection and compensation for losses caused by the implementation of risks of using ICT and innovation based on creating the Collective Risk Insurance Fund of financial institutions; offer approaches to the calculation of variable and fixed parts of the contribution to the insurance fund for certain groups of financial institutions. It is concluded that to maintain the proper operational stability of financial institutions in Ukraine, it is necessary to introduce additional collective compensation methods for the risks of innovation and the strengthening of cyber threats.
The article investigates the modern conditions and problems of forming local budget revenues in Ukraine. It is determined that local budgets must function as a well-oiled machine ensuring the equivalence of financial resources and planned allocations under conditions of financial decentralization. Approaches to ensuring budgetary independence are substantiated, outlining the tools necessary for local self-government bodies to ensure their capacity to develop. It is established that increased emphasis on independence of local budgets can become one the levers used for ensuring the local finance system complies with the principles of the European Charter of Local Self-Government and Law of Ukraine «On Local Self-Government in Ukraine». For this purpose, local self-governments are recommended to establish a sufficient and stable revenue base by introducing their own taxes and fees, expanding the non-tax revenue sources, changing the distribution of the revenues from the income tax and corporate tax between government budgets of different levels, creating community funds of economic development, balancing subsidies and subventions. It is argued that budgetary independence is an economic ideal that local self-government bodies should strive for. Its antipodes are rigid financial dependence of local budgets on state budgets, lack of own revenues, and ineffective distribution of funds between budgets of different levels. Additionally, the revenue sources specified in the legislature do not allow the authorities to sustain expenditures with the levies at local level. It is substantiated that territories with independent local budgets can create the state economic environment that corresponds to the principles of financial decentralization.
The use of digital money creates not only threats, but also opportunities for economic development, but in Latvia and the Baltic countries, they are not sufficiently researched and not widely spread. The paper aims to identify the reasons for the lagging behind of the Baltic countries and Latvia in the development of the cryptocurrency market and to develop recommendations for improving its regulation and functioning. Based on the methods of cross-country, statistical and sociological analysis, the national factors of differences in the functioning and regulation of cryptocurrencies in Latvia, Estonia, and Lithuania have been identified and the risks of its use for illegal activities have been assessed. It is shown that the role of cryptocurrencies in the financial markets of the Baltic States is determined by the degree of their use for payments and investments, which depends on their recognition by the state and investors. It has been revealed that the definition of the concept of cryptocurrency in the EU and the Baltic countries, primarily in the money laundering and terrorist financing (ML/TF) directives, does not stimulate the use of its positive features. A correlation between the restrained attitude towards cryptocurrencies in Latvia and its large-scale business relations with the CIS countries with a higher proportion of shadow economy, caused by the peculiarities of its history and geographical location, has been revealed. The Latvian banking system, under the influence of international regulators, has become less appropriate for operations of non-residents from the East, which increases the risk of using cryptocurrency for ML/FT purposes. The factors of motivation, advantages and difficulties of the businessmen of the Baltic countries they face when dealing with cryptocurrency have been identified, and a discrepancy in the regulation of taxation of transactions with cryptocurrency and the respective activities in Latvia has been revealed. Recommendations are given to the state and private investors pertaining to the integration of cryptocurrencies into the economic space, the implementation of which will contribute to the development of the digital economy and growth of wealth of Latvian residents. The results of the study can be used to improve government regulation and private investments in the cryptocurrency market, as well as in the study and further research of this problem
The year 2020 has shown the quick spread and devastating effect of Coronavirus (COVID-19) on the world economy, health, and human life. Combating the COVID-19 pandemic is crucial. Blockchain technology can assist in the fight against the COVID-19 pandemic by assuring safe and reliable medical supplies, accurate identification of virus hot spots, and establishing data provenance to verify genuine personal protective equipment that is decentralized, reliable, traceable, and transparent. A major proportion of current healthcare systems are centralized and are short on privacy and information necessary for the detection of fraud connected to the certification by the COVID-19 vaccine. The quick vaccination rollout and the deployment of a global vaccination campaign are crucial and dependent on the availability of transparent and operational distribution chains, which may be audited by all the necessary parties. Blockchain technology might also be used to assure transparent monitoring, storage, and distribution of COVID19 vaccinations. Smart contracts are built for monitoring and tracking the proper circumstances of vaccine distribution in comparison to safe handling of vaccine producers, informing all network peers. This study aims to investigate the effectiveness of block chain and smart contracts in the health care system. The article presents a model of the decentralized infrastructure of the health care system. The blockchain and intelligent contract technology provided has shown promising results. The proposed solution is economically feasible and ensures data integrity, security, transparency, and traceability. Future work aims to expand the functionalities of smart contracts and the blockchain technology.
Open access
Blockchain Technology Applications and Security
Business and Economic Development
Legal, Health, Environmental and COVID-19 Challenges
Rapid digital economy development brings about not only new opportunities, but new risks as well. Absence of any virtual borders, simplicity of transactions between investors from different countries created by digital technologies and the difficulty in the identification of persons entering into such transactions create a national security threat causing the need for the public regulation of the digital environment. This conclusion is especially relevant in respect of cryptocurrency relationships presenting an international alternative to national payment relationships.
The article is aimed at deeper studying and identifying the theoretical and methodological principles for the formation of sources of expansion of the fiscal space of territorial communities in the context of transformation processes in Ukraine. The publication proposes the authors’ own definition of the category of «fiscal space of territorial communities» as an environment for interaction between fiscal policy actors on the redistribution of budget resources and ensuring the financial capacity of amalgamated hromadas (AHs). The composition of revenues of budgets of AHs is analyzed. The main advantages of decentralization and certain risks inherent therein are presented. The goals of administrative and financial decentralization in terms of levels of public administration are characterized. The share of local budget revenues in the GDP of different countries is studied. It is defined that in the process of decentralization, the tax system of Ukraine has undergone changes in the structure of tax distribution between levels of management directed towards the benefits of local self-government. In particular, as the financial basis of local self-government in terms of the performance of their own powers is determined taxes and fees that have a direct «connection» with the territory of the relevant administrative and territorial unit. By amending the Budget and Tax Codes of Ukraine, it was achieved to consolidate stable sources of income of local budgets and expand the budget powers of local self-government bodies. Prospects for further research in this direction are the development of practical recommendations on the sources of expansion of the fiscal space of territorial communities in the context of transformation processes in Ukraine, the definition of effective and affordable ways to finance territorial communities.
The primary intention behind this study is to assess and compare current studies, aggregate datasets and information from already existing investigations and add own datasets for explaining some effects of popularity and pricing of cryptocurrency on Bitcoin and Ethereum examples. The advantages and disadvantages of using cryptocurrency at the present stage of economic development of Ukraine are considered. The results of the research of the awareness of market participants regarding the disadvantages and advantages of cryptocurrency and the presence of interest in the usage of cryptocurrency in range period from beginning to now are given. The aim of this article is to study the possibilities of using cryptocurrency for economic development. The object of the research is the process of using cryptocurrency in the markets of Ukraine and the whole world. The results of a study of the demand for cryptocurrency in Ukraine. The research was conducted with the result of a questionnaire which were taken from previous investigation and compared with own datasets, and as a result of which it was found out: the level of awareness of cryptocurrency; subjective perception of cryptocurrency; the presence of the potential interest of Ukrainians in the acquisition of cryptocurrency; media effect on people interest; cryptocurrency pricing correlation from people interest; sources of awareness of cryptocurrency. It was found what exactly Ukrainians consider the main disadvantages and advantages of cryptocurrency. Cryptocurrency as a tool of payment and a type of electronic money is found in most countries of the world in the “grey” zone, and regulators, if not forbid, then at least do not recommend citizens to invest in such assets. However, the expertise of Ukrainian blockchain developers allows using cryptocurrency in the Ukrainian markets for the effective implementation of world experience.
Budget financing of social protection and social security is one of the important factors of social development, which determines the standard of living and well-being of the poorest. The leading role of local budgets of Ukraine in the implementation of the social function of the state is determined by increasing the efficiency of the process of providing public services due to proximity to their immediate consumer. This process is based on the principle of subsidiarity, requires a sufficient level of financial security of local governments and demonstrates the basic idea of the concept of budget decentralization. The current practice of financing measures for social protection and social security of the population by local budgets of Ukraine is analyzed in the article in order to determine its effectiveness in conditions of limited budget resources of the state and the need to provide social guarantees for citizens. The grouping of EU member states according to the priority of expenditures on social protection of the population was conducted, a comparison with the corresponding indicators in Ukraine was made. The share of expenditures on social protection and social security of the consolidated budget in the GDP of Ukraine is calculated. The role of expenditures on social protection and social security in the expenditure part of local budgets of Ukraine is determined, their structure is considered. It is proved that the financing of social expenditures is chaotic; there are no steady trends in the dynamics of the share of individual components of social expenditures. In view of the reform of budget decentralization in Ukraine, the distinction between budget financing of social protection in the context of state and local budgets is studied. It is determined that the share of expenditures on social protection and social security in the structure of local budgets of Ukraine is high, however, in practice it does not always provide an adequate level of quality of social services to the population. The need to develop a comprehensive approach to reforming the budgetary mechanism for the implementation of the social function of the state on the principles of stability, transparency and balanced parity of interests of the state and society is substantiated.
The article analyzes the impact of 44 different factors on the change in the price of bitcoin, such as: yields on US one-year bonds, prices for futures on palladium, platinum, gold, silver, copper, Chinese stock indices, German stock index DAX, French index CAC 40, stock indices of South Africa, India, Mauritius, England, Switzerland, Sweden, South Korea, etc. The most influential factors were selected, with the help of which two regression models were built. The presence of insignificant factors in the first model led to the need to consider the second one, which is much better. The second model lacks multicollinearity, but there are autocorrelation of residues and heteroscedasticity. There was an attempt to eliminate autocorrelation of residues, but it led to a significant reduction in the coefficient of determination to 22%. An attempt to explain the causality of the Bitcoin exchange rate to the KOSPRI index has been made. South Korea is a country, which actively cooperates with two main leaders in Bitcoin mining, namely China, where 65 % of new bitcoins are created, and the United States – 23 % of new bitcoins. Modern economic leaders actively influence not only the economy of their country, but also other economies. Korean companies are actively penetrating both the Chinese economy and the US national economy, which determines their impact on Bitcoin mining, as a large amount of necessary electronics is produced by South Korean companies such as SK hynix Inc. As for the palladium futures rate, palladium is a metal which is actively used in production of the electronics needed to mine bitcoin. Prospects for further research depend on trends in the price of bitcoin. It is possible that the price of the cryptocurrency Bitcoin will gradually rise, as some corporations begin to recognize Bitcoin as a means of payment for goods and services. This will increase demand and, as a result, prices. The confidence of large companies in Bitcoin will indicate the reliability of the cryptocurrency, which in turn will give confidence to minority investors in the need to add cryptocurrency to investment portfolios. The rise in prices will indicate the need to study the impact of various factors on changes in the price of Bitcoin. If the popularity of cryptocurrency begins to wane, it will lead to a rapid loss of its price. This development option will indicate the inexpediency of continuing to study the relationship of this cryptocurrency with these factors and the need to find other ones.
Одесский региональный институт государственного управления Национальной Академии государственного управления при Президенте Украины, Светлана Осадчук
Goal – the goal of the paper is to put into perspective the institutional and legal framework of the decentralization reform in Ukraine, as well as to identify problems, explore trends, and provide proposals in reference to the relevant foreign experience in the field. It argues that the decentralization reform in Ukraine has positive results and is an important step towards increasing the autonomy of local authorities. In concludes with arguing that Ukraine should apply the relevant experience of foreign countries while conducting its decentralization reform. Research methodology – the methods used in the article are analysis of official docu ments coming from the Ministry of finance, the Ministry of Economics and the Tax Service of Ukraine, as well as analysis of the factors that promote the autonomy of local government in Ukraine. Score/results – the article is distinguished by a sufficient level of scientific analysis and has provisions, suggestions and practical recommendations that can be used for further research on decentralization issues. Originality/value – the article presents the original complex approach to the problem of decentralization reform in Ukraine and provides substantial analysis of its legal and institutional framework.
This article considers a fundamentally new type of forensic objects – virtual assets. It is noted that currently in Ukraine there is no legislation governing the circulation of virtual assets. The concept of the term «cryptocurrency» is defined by the state bodies of Ukraine, the issues of the essence of cryptocurrency, the order of its circulation are investigated, the assessment of the current state of cryptocurrency in various aspects is given. An algorithm for identifying cryptocurrency and its owner during forensic examination of virtual assets is proposed. Methodological issues of cryptocurrency valuation are considered. It is noted that in the decentralized economy of digital assets, the loan interest rate is absent or works completely differently. The absence of refinancing rates and derived key rates in digital finance, as well as other regulatory instruments, is due to the lack of centralized monetary policy institutions for cryptocurrency. It has been found that the application of traditional valuation and financial analysis methods to digital assets is completely incapable, as all models used for this type are based on borrowed interest and the value of money over time, as interest rates in the centralized financial system are ultimately set by monetary authorities. issuing currencies. It is offered to determine the value of cryptocurrency during the forensic examination of virtual assets at the exchange rate with appropriate adjustments.
The article explores the possibilities and international experience of using multi-functional and multi-level information blockchain technology, the main purpose of which is reliable accounting of financial transactions with various assets. A mechanism for determining the legitimacy of transactions sequence carried out using distributed ledger technology is considered. The main directions of the distributed ledger technology application by the business community in all spheres and sectors of the global economy are identified. The mechanism of using smart contracts based on block-technology in the Treasury servicing system was designed and presented. The preformed mechanism covers the management process of all Treasury servicing procedures of the estimates expenditure part of budget managers. The complex of advantages from the implementation of distributed ledger technology to the Treasury servicing system for state and local budgets is determined.
Decentralization of authority in Ukraine takes place against the background of the general difficult economic situation caused by both internal unrest and the global crisis provoked by the Coronavirus Epidemic. Under such conditions, the issue of creating local communities capable of financing their own expenditures, and especially development expenditures, becomes acute and relevant. The purpose of the article is to develop proposals for improving the mechanisms of distribution of funds in the community in the context of their direction to improve the living conditions of the population in accordance with the identified priorities. To achieve this goal, it is proposed to use a matrix of priority needs of the community, which is a novelty of the study. The following methods were used in the article: analysis and synthesis (to collect and systematize the results of existing research); statistical (for statistical data processing); comparison (to compare indicators for different groups of communities); matrix (to determine the priority of community needs). The paper evaluates the financial capacity of local communities formed during 2015–2019. It is determined that large communities, with a population of more than 5,000 people, with an area of 400 km2 and more, have the highest level of socio-economic capacity. According to two other criteria, the solvency index and the share of local taxes and fees, the leaders are small communities that have production on their territory, recreational areas, and so on. It is proved that the important point is the organization of management of available resources. Because in the end, the living conditions in the territory are determined not only and not so much by the availability of resources, but by the efficiency and directions of their use. It was found that the current mechanism of distribution of “free” funds is based on a purely subjective approach and is based on “existing needs”. Strategic documents are often only formally used in the budget process. To minimize the miscalculations in the current and strategic planning of the integrated development of the united local communities, it is proposed to use the matrix method of determining the priority of needs. The number of blocks of the matrix and the levels of needs for each block are variables and depend on the specific situation in the community. The presence in the matrix of information about the cost of meeting each need will allow make decisions with a certain amount.
The introduction of local government reform in Ukraine, part of which is financial (fiscal) decentralization, the functioning of local budgets has forced to significantly change the approaches of local governments to the management of community funds. Despite the clear provisions of local government reform, local councils have a number of problems with filling the revenue side of local budgets, leading to inefficient and underutilized use of community funds. A number of Ukrainian scholars pay attention to local finances, but the issues of filling and using local budgets are mainly considered in terms of articles of the general fund, while the special fund is characterized by funds coming to specific purposes and almost unmanageable. The purpose of the study is a detailed consideration of the theoretical foundations of the existence and functioning of a special fund of local budgets, its role and importance in performing the financial functions of the community. The new budget governance mechanism has forced local authorities to step up their efforts to address their own issues and costs, allowing them to keep significant sums at their disposal, which, however, are not sufficient. The opportunity to earn more income has also been offered by the reform of financial decentralization, but it requires cohesion in the community between all its main components: government, business and the population. Finding ways to increase the local budget to finance their own issues requires a constant search for opportunities to generate additional income, sources of use and use of reserves, which is possible, appropriate and increase the efficiency of local budgets. Such possibilities have been identified and described in this study. The share of the special fund of local budgets, as you know, is not the largest, but the work on its replenishment has not only financial but also a certain synergistic effect in the community, promotes cohesion and motivation for further social and economic development. Unfortunately, among the management of these institutions and local self-government there is often no desire to consider the possibility of finding their own reserves for the implementation of such activities, which significantly reduces the financial capacity of the local budget.
The purpose of the article is to conduct a retrospective analysis of the volume and structure of financing of public goods in accordance with the change of the political elite in Ukraine (changes of the Presidents of Ukraine).The research methodology consists in calculating the dynamics of the expenditure part of the consolidated budget of Ukraine in terms of functional classification of expenditures, the share of the main items of the consolidated budget expenditure for 1992-2020, the share of the expenditure part of the consolidated budget of Ukraine and the main expenditure items in GDP. According to the results of the study, the dynamics of changes in the total volume and structure of financing public expenditures in accordance with the change of the political elite is revealed. The practical significance of the analysis indicates that the system of expenditure of the consolidated budget of Ukraine, respectively, the structure of financing public goods, is imperfect and needs to be adjusted. Thus, the largest share of expenditures of the consolidated budget of Ukraine, which has recently been decreasing from year to year, is spent on financing social protection and social security. The volume of expenditures on economic activity, which is able to give impetus to the development of the state economy, is insufficient. Expenditures on education and healthcare in Ukraine have been significantly reduced. Due to these budgetary resources, the financing of national functions by the state, financing of public order, security and the judiciary has been increased. Imperfection of fiscal policy, unreasonable financing of certain areas, insufficient control over the implementation of budget programs, their inefficiency and many other problems lead to irrational use of funds from the budgets of Ukraine. Therefore, in order to establish stability in the economic sphere of the state, it is necessary to restrain the growth of the share of consolidated budget expenditures relative to GDP. This will reduce the tax burden on the population and business, reduce the state budget deficit of Ukraine. When allocating expenditures, it is necessary to start from the size of the revenue side of the budget in order to achieve proportional growth of revenues and expenditures. It is worth paying attention to ensuring reliable control over the movement of budget resources. In order to increase the degree of satisfaction of the needs of the population in public goods, it is necessary to develop the political consciousness and political culture of citizens, to increase the level of financial decentralization in the country.
The implementation of the financial decentralization reform in Ukraine, which is the most important component of the general reform of local self-government in Ukraine for seven years, already has the first results and materials for research and conclusions. The state has proposed stages of reform and further activities of local governments. The government ensures the declared national expenditures delegated to local councils and recognizes the significant degree of their independence in planning, creating and implementing their budget plans. However, at the local level there are a number of problems that lead to inefficiency or inexpediency of costly financial activities. The article considers the most significant, effective and universal conditions and factors for improving the efficiency of spending financial resources of local budgets in the implementation of local government reform in Ukraine. The reasons for the need to implement the reform of financial decentralization and the problems it should solve are presented. Among the described bases of increase of efficiency of use of means – legislative, organizational, resource. Their definition was made possible by studying the results of community spending management during the first years of the reform. Most of them have an organizational character, i.e. one that is possible for the community to implement as a cohesive social body at the local level, have a low level of costs or opportunities for external financing or co-financing. Factors of its implementation, author’s comments and evaluation of efficiency are provided to each defined condition. The most important among the basics of effective spending of local budgets are: the availability of necessary and quality legislation, preparation and use of motivated staff of local governments, creation and implementation of social dialogue in the community, comprehensive control and analysis of public spending, determining responsibility for job responsibilities relevant employees, use of foreign experience and best financial practices of Ukrainian communities, use of energy-saving technologies, optimization of local government maintenance costs. Each of the presented bases has the described factors of their implementation which are described in article. The use of such factors makes it possible to use the available on a possible basis the effectiveness of the use of local funds, an important component of the community’s own resources during the reform of local self-government.
The article is aimed at disclosing the role and significance of the excise tax on fuel in filling local self-government budgets in the context of the implementation of budget decentralization, also disclosing the main aspects of excise tax reform, changes in its distribution between budgets and finding ways to ensure the stimulating impact of excise taxation on the socio-economic development of territorial communities (hromadas). The article describes the steps taken to strengthen the financial capacity of local self-government (changes in the sources of filling the hromadas’ budgets) by introducing budget decentralization, steps to implement decentralization in the sphere of road infrastructure of Ukraine (distribution of functions and powers in the road sector at the subregional level of management and introduction of an updated mechanism for financing the road industry). The significance and role of excise tax on fuel in the formation of budgets of territorial communities in the context of implementation of budget decentralization and decentralization in the road sector are analyzed and disclosed. The main aspects of excise tax reform, changes in its distribution between budgets during 2014-2020 in the context of the implementation of decentralization are presented. A number of substantiated arguments are given regarding the need to preserve the crediting of the excise tax on fuel to the local self-government budgets. The issue of the need to improve the distribution of subventions to roads in order to achieve fairness and eliminate the asymmetry of the financial capacity of territorial communities to develop road infrastructure and ensure the stimulating impact of excise taxation on the socio-economic development of all territorial communities is actualized.