Budget Sustainability Research Articles

Dynamic Interrelation between Aggregated Revenues and Expenditures of Regional-Level Budgets of Federal States: A Time-Frequency Approach to Analysis

Objective: The article analyzes the dynamic (time-frequency) relationship between aggregate budget expenditures and revenues of the federal constituent entities, considering four competing theoretical hypotheses: “expenditures-revenues”; “revenues-expenditures”; “fiscal synchronization”; and “fiscal neutrality”, over time (2013:12÷2023:03). Method: The study was conducted using wavelet coherence analysis, which made it possible to separate short-term, medium-term and long-term effects in the dynamic dependence of the analyzed variables, and identify the direction and intensity of this relationship. Finding: The research results indicate the existence of all four relationships between aggregated budget revenues and expenditures of the federal constituent entities for various time periods, on different time scales, throughout the entire observation time interval (2013:12÷2023:03). These findings demonstrate that, to a greater extent, the budgets of the federal constituent entities are characterized by the presence of a dynamic relationship between aggregated revenues and expenditures in the following modes: “revenues-expenditures” (when revenues are ahead of expenditures) and “expenditures-revenues” (when expenditures are ahead of revenues). In addition, the time scale and time range of the emergence of the “fiscal synchronization” and “fiscal neutrality” modes in the relationship between aggregated revenues and expenditures of the federal constituent entities are determined. Implication: The results obtained provide a possible explanation for the contradictory results of numerous studies based on traditional methods and empirical observations over different historical periods, since each of these methods only partially explains a particular mode of the dynamic relationship between revenues and expenditures. The theoretical significance of the study lies in the substantiation that continuous wavelet analysis is a powerful tool for studying the nonlinear relationship between revenues and expenditures, since understanding the causalities between revenues and expenditures on various time scales is significant for choosing measures aimed at maintaining the budget sustainability of the federal constituent entities. The practical significance of the research results is determined by the fact that they can be an essential starting point for determining the necessary fiscal policy measures aimed at increasing the budget sustainability of the federal constituent entities.

Fiscal dominants of military financing

Long-term military aggression has required updating approaches to budget revenue forma­tion to increase the fiscal effectiveness of taxes and ensure budget sustainability. The article is aimed to substantiate the main priorities for boosting the efficiency of the central budget revenue formation system in combating full-scale military aggression, which involves compliance with the principle of fiscal suffi­ciency in financing defense and security needs and fostering economic recovery. Syste­matic and logical approaches were used in the article. Various methods were applied, including gene­ralization, comparison, analysis and syn­the­sis, scientific abstraction and expert eva­luations. The USA’s experience in the field of budget revenues formation during wars shows that the authorities tried to design the taxpayer’s trust and ensure a fair cost for conducting a war for every citizen. The classic measures were increased tax rates on income and profits, and the active sale of government bonds. Great Britain has applied identical measures. The budget revenues formation policy has demon­strated significant changes since the full-scale invasion. The percentage of GDP redistribution through the central budget revenues in 2023 equaled 41.76%. The main features of tax revenues shaping (into a central budget) in 2022–2023 have been identified. Priority measures to raise the fiscal significance of tax revenues have been substantiated. This concerns the decrease of the shadow part of the gambling business; the excise goods markets; and labor incomes. In addition, the prerequisites for introducing a progressive personal income tax scheme have been determined.

РОЛЬ БЮДЖЕТОВ В УСТОЙЧИВОМ РАЗВИТИИ ТЕРРИТОРИЙ: ЭКОЛОГИЧЕСКОМ, СОЦИАЛЬНО-КУЛЬТУРНОМ, ЭКОНОМИЧЕСКОМ

In the article the authors raise important questions about the role of budgets in the sustainable development of territories, because If budget expenditures are not included for measures to develop environmental, socio-cultural and economic issues then the goals of sustainable development of the territory and the economy as a whole cannot be achieved. The role of municipalities in sustainable development is being transformed in modern conditions and municipal finances are becoming not only the economic basis of local self-government, but also the political exchange «state-population». It seems that the role of budget sustainability in the balanced development of territories is also increasing. Analysis of the conceptual apparatus, approaches to assessing sustainable development and strategic planning documents allows us to draw a logical conclusion about the need to create unity in theoretical, methodological and legislative approaches to the issues of sustainable development of territories. Budget sustainability indicators are crucial in assessing the sustainable development of a territory. It is argued in the article that the development of the socio-cultural sphere should be the starting point for achieving sustainable development. It is essential to consider budget sustainability alongside other indicators to ensure long-term success and resilience in a territory’s development. By prioritizing the socio-cultural sphere, a holistic approach to sustainable development can be achieved, ensuring the well-being of current and future generations. Using the example of the implementation of state programs in the socio-cultural sphere and the strategy for the formation of «Smart» regions (using the example of St. Petersburg), the authors present a comprehensive analysis of the connection between sustainable development indicators and the sustainable budget of individual subjects of the Russian Federation and the state as a whole.

Стратегия социально-экономического развития муниципалитета как фактор финансовой устойчивости местного бюджета (на примере Тунгокоченского муниципального округа)

The article is devoted to the study of the influence of socio-economic development strategies of municipalities of the Transbaikal Territory on the financial sustainability of local budgets. The legislative and practical foundations of strategic planning at the municipal level currently in force in Russia have revealed a sufficient number of problems, both in theory and in planning practice. The application of these principles in practice indicates that the development of strategic planning documents often does not lead to the achievement of the strategic goals laid down in them. Due to the fact that at various levels of government, considerable attention is paid to the development of strategies for the socio-economic development of both the country as a whole and each individual municipality, the issue of supplementing the strategic planning system at the municipal level is relevant. The object of the study is the strategy of socio-economic development of municipalities. The subject of the study is the influence of the socio-economic development strategy of the municipality on its budgetary sustainability. The purpose of the study is to analyze the indicators of municipal budget sustainability and substantiate the need for their compliance with the socio-economic development strategies developed in municipalities. The main objectives of the study are to identify the correspondence between the strategy of socio-economic development and the budget policy of the municipality, and to develop a model of the influence of the socio-economic strategy on the indicators of financial sustainability of the municipal budget. The study of the strategic municipal planning system revealed a lack of relationship between the socio-economic strategy and the municipal budget. The conclusions are substantiated that the strategies for the socio-economic development of municipalities developed by local governments should have as their goal not only improving the quality and standard of living of its population, increasing the attractiveness of the territory, etc., but also the financial sustainability of the local budget, which is one from sources of financing activities included in the development strategy.

Влияние COVID-19 на бюджетную обеспеченность жизнедеятельности населения

The article discusses the problems that arose during the COVID-19 pandemic and the post-pandemic period related to the budgetary security of people's livelihoods. The purpose of the article is to show the need to resolve issues related to the decrease in budget revenues, which is reflected in the level of livelihoods of the population of the territories. To understand the problems that have arisen, the concepts of “budget sustainability” and “fiscal security” are identified, and the author’s point of view regarding the nature of these concepts is proposed. The authors hypothesized that the quality of budget planning affects the level of budgetary security of people, and, consequently, their level of living. And this type of problem can be minimized using methods used to solve socially oriented problems. In the author's study, special emphasis is placed on the ideology of territorial assessment, which is based on an indicative approach. A methodological approach to express assessment of the level of budgetary security of people's livelihoods based on an analysis of relative budget indicators is proposed. The assessment was carried out comparatively across twenty regions and showed mixed results, but most regions experienced a deterioration in budgetary security not only during the pandemic period, but also in the post-pandemic period. The fact has been revealed that the process of formation of budget funds and their further distribution occur in uncertain conditions. The main conclusions of the authors prove that during the pandemic and post-pandemic impact on the budgetary security of people's livelihoods, regional and local authorities are faced with difficult tasks in preventing and eliminating socially oriented problems.

Projecting the Potential Budget Impact Analysis of Paliperidone Palmitate in Egyptian Adult Patients with Schizophrenia.

Background: Schizophrenia is a serious mental disorder that has greater negative consequences on role functioning than many other severe chronic diseases. Objective: We evaluated the economic impact of long-acting injections of paliperidone palmitate (PP) vs daily oral antipsychotics to treat chronic schizophrenia from a societal perspective over a 2-year period. Methods: A static budget impact model was developed to compare PP with daily oral antipsychotics (risperidone, olanzapine, and aripiprazole) in the treatment of patients with chronic schizophrenia. Our study included treatments used during relapse and hospitalization, validated by an expert panel. The clinical parameters were extracted from the PRIDE trial. Direct medical costs and indirect costs were measured. The unit cost of drug acquisition for all medications was extracted from the public sector. One-way sensitivity analyses were conducted. Results: The target population in our model was estimated to be 142 incident patients. In the first year, the total drug costs in Egyptian pounds (EGP) for PP and oral antipsychotics were £2.7 million and £724 004, respectively, while the total medical costs for PP and oral antipsychotics were £3 million and £5.6 million, respectively. In the second year, the total drug costs for PP and oral antipsychotics were £2.7 million and £724 004, respectively, while the total medical costs for PP and oral antipsychotics were £3 million and £5 million, respectively. The total costs for PP (£11.6 million) over 2 years were less than those of oral antipsychotics without PP (£12.7 million). PP produced an estimated budget savings of £1 046 561 (budget savings per patient per year, £3667). In addition, PP resulted in the avoidance of 18 hospitalizations per year compared with the without-PP arm. Sensitivity analyses showed that the percent of hospitalizations for both oral antipsychotics and PP had the greatest impact on the results. Conclusion: The lower hospitalization rates associated with PP offset the increase in drug costs. PP may potentially be cost-saving compared with the standard of care in chronic schizophrenia in Egyptian representative healthcare settings. Policy makers may consider this approach to improve patient outcomes and budget sustainability.

Lsisi G, Ezzat M, Ramadan M. Projecting the Potential Budget Impact Analysis of Paliperidone Palmitate in Egyptian Adult Patients with Schizophrenia

Background: Schizophrenia is a serious mental disorder that has greater negative consequences on role functioning than many other severe chronic diseases. Objective: We evaluated the economic impact of long-acting injections of paliperidone palmitate (PP) vs daily oral antipsychotics to treat chronic schizophrenia from a societal perspective over a 2-year period. Methods: A static budget impact model was developed to compare PP with daily oral antipsychotics (risperidone, olanzapine, and aripiprazole) in the treatment of patients with chronic schizophrenia. Our study included treatments used during relapse and hospitalization, validated by an expert panel. The clinical parameters were extracted from the PRIDE trial. Direct medical costs and indirect costs were measured. The unit cost of drug acquisition for all medications was extracted from the public sector. One-way sensitivity analyses were conducted. Results: The target population in our model was estimated to be 142 incident patients. In the first year, the total drug costs in Egyptian pounds (EGP) for PP and oral antipsychotics were £2.7 million and £724 004, respectively, while the total medical costs for PP and oral antipsychotics were £3 million and £5.6 million, respectively. In the second year, the total drug costs for PP and oral antipsychotics were £2.7 million and £724 004, respectively, while the total medical costs for PP and oral antipsychotics were £3 million and £5 million, respectively. The total costs for PP (£11.6 million) over 2 years were less than those of oral antipsychotics without PP (£12.7 million). PP produced an estimated budget savings of £1 046 561 (budget savings per patient per year, £3667). In addition, PP resulted in the avoidance of 18 hospitalizations per year compared with the without-PP arm. Sensitivity analyses showed that the percent of hospitalizations for both oral antipsychotics and PP had the greatest impact on the results. Conclusion: The lower hospitalization rates associated with PP offset the increase in drug costs. PP may potentially be cost-saving compared with the standard of care in chronic schizophrenia in Egyptian representative healthcare settings. Policy makers may consider this approach to improve patient outcomes and budget sustainability.

Sustainability of budgets of the subjects of the Russian Federation: Problems of interpretation and approaches to its definition

The article deals with the problems of determining budget sustainability, regarding the interpretation of which there is no consensus. The existing basic approaches to determining the budgetary sustainability of the subjects of the Russian Federation are disclosed.

IMPROVING THE TOOLS OF STATE MANAGEMENT OF LOCAL ECONOMIC DEVELOPMENT

The study emphasizes the urgency of the problem of improving the system of tools that can be effectively used to ensure effective and balanced local socio-economic development in Ukraine. The purpose of the study is to improve the tools of state management of local economic development. It has been proven that the effective regulation of the development of territorial communities is based on the capacity of the tools of local economic development, which is a complete complex consisting of goals, strategic tasks, goals, mechanisms and means of regulation. The goal of designing local economic development is determined, namely, in the form of developing tools and means of increasing the resource potential of strengthening the capacity of the community through: improving the investment climate and activating the business environment; improvement of entrepreneurial skills of the local population; strengthening the budgetary stability of the community as the basis of economic progress; strengthening cooperation with various target groups (youth, women, IDPs). It has been proven that in the process of ensuring the local economic development of the community, it is important to focus on solving the following tasks: development of tools for strengthening the economic capacity (self-sufficiency) of the community; improvement of resources attraction tools; strengthening of budget sustainability; development of means and measures for activation of entrepreneurial activity; development of tools for youth participation in decision-making and implementation of ideas for the future vision of community development. It is summarized that the implementation of the local economic development program involves the interaction of such subjects as: state and local self-government bodies, industry associations and business associations, business entities, public organizations and political parties, and the population. The key elements of the implementation mechanism of the local economic development program have been identified.

Status and Prospects of Federal Budget Sustainability in the New Environment

The sustainability of the federal budget is currently subject to multiple risks. Despite a temporary increase in oil prices, federal budget revenues are declining rapidly. As correlation analysis has shown, oil and gas revenues of the federal budget become more volatile during structural crises. At the same time, non-oil and gas revenues are declining. The instability of the foreign policy situation and the ongoing military actions greatly increase the risks of increased federal budget expenditures. In the short term, the budget deficit can be covered by the accumulated liquid reserves of the National Welfare Fund. However, in the longterm perspective, the restrictions affecting Russia’s sustainable economic growth will have an impact on the fiscal sphere. The government will have to take unpopular measures to reduce expenditures and raise taxes on the non-oil and gas sector in order to maintain the stability of the public finance system.

Assessment of public debt sustainability in the Balkan market

This research paper focuses on the relationship between public debt and the economy in the Republic of North Macedonia. Debt size has become a crucial indicator for monitoring the health of economies, and North Macedonia’s economy is often reliant on borrowing. The COVID-19 crisis exacerbated the country’s already high level of debt, limiting budget response options. The effectiveness of implemented measures to mitigate the crisis depends on their adaptation to specific conditions. To assess the sustainability of public debt, the study uses ordinary least squares (OLS) and multivariate regression analysis, providing an empirical evaluation of North Macedonia’s public debt sustainability by using data from the Ministry of Finance. The main findings of the paper reveal insights into the sustainability of public debt and the impact of fiscal policies on economic stability. The study highlights the importance of careful debt management and the need for fiscal policies that strike a balance between supporting economic growth and maintaining budget sustainability. The empirical analysis and methodology employed in the study offer valuable insights for policymakers and researchers, aiding in the formulation of effective fiscal policies. Research has its limitations on the usage of the quartile data for earlier periods — transition periods that were not available.

Устойчивость региональных бюджетов на Дальнем Востоке России

Some approaches to assessing the fiscal sustainability of regions used in the public administration and research are considered. The need to apply comprehensive assessment of fiscal sustainability, covering a wide range of aspects, is argued. Key indicators characterizing the fiscal sustainability of the regions of the Far East are analyzed: budget dependency, public debt level, capital investment share, etc. Based on the ratings of the constituent entities of the Russian Federation, comparative estimates for the Far-Eastern regions in 2020–2022 were obtained characteristics and parameters that require the most attention to improve the budget sustainability and overcome the lag behind the most regions of the country were identified.

Directions of development of the system of interbudgetary relations in the conditions of decentralization

Relevance of the research topic. The effectiveness of inter-budgetary relations is an important prerequisite for stabilizing socio-economic processes. Decision-making on the appropriateness of the use of appropriate budgetary tools should be determined based on the assessment of changes in the level of economic development of administrative-territorial units. Timely consideration of the impact of exogenous and endogenous factors on budget sustainability will contribute to the development of sound budget architecture. Accordingly, in modern conditions, it is advisable to strengthen decentralization processes. The tasks of improving the quality of development of the system of inter-budgetary relations became important. Formulation of the problem. Important tasks in the current conditions of development of the system of state and local finances are: strengthening the financial base of local governments; delimitation of expenditure powers between public authorities and local governments; equalization of disproportions of socio-economic development of administrative-territorial units; search for alternative sources of local budget revenues; optimal choice of fiscal instruments and levers; optimization of the structure of revenue and expenditure powers of local governments. Analysis of recent research and publications. Problems of development of the system of interbudgetary relations in the conditions of budgetary decentralization are quite widespread in scientific researches. These are the works of famous domestic and foreign scientists: J. Keynes, P. Samuelson, J. Stiglitz, V. Tanzi, O. Kirilenko, I. Chugunov and others. Selection of unexplored parts of the general problem. The above issues are relevant in connection with the deteriorating trend of economic development, which requires a number of specific tasks related to the development of financial instruments of the system of intergovernmental relations. Problem setting, research goals. The objectives of the study are: to reveal the role of the system of inter-budgetary relations in the regulation of socio-economic development of administrative-territorial units; substantiate the features of the system of intergovernmental relations in modern conditions; to analyze and estimate revenues and expenditures of local budgets. The aim of the study is to reveal the directions of development of the system of inter-budgetary relations in the conditions of budget decentralization. Method or methodology of the study. The article uses a set of research methods: a systematic approach, statistical analysis, structuring, synthesis, etc. Presentation of the main material (results of work). The role of the system of inter-budgetary relations in the regulation of socio-economic development of administrative-territorial units is revealed. The peculiarities of the system of intergovernmental relations in modern conditions are substantiated. The analysis and estimation of incomes and expenses of local budgets is carried out. The directions of development of the system of interbudgetary relations in the conditions of budgetary decentralization are determined. Field of application of results. The results of the study can be used in the process of forming and implementing budget policy. Conclusions according to the article. The validity of the budget policy in terms of inter-budgetary relations is an important condition for achieving national socio-economic interests. The economic crisis caused by the coronavirus epidemic and the general reduction in the growth rate of revenues to local budgets have exacerbated the problems associated with the development of the system of intergovernmental relations. Given the transformational processes of development of the domestic economy, the issues of developing new and improving the existing financial and budgetary tools for regulating intergovernmental relations are important.

A trade-off between old-age financial adequacy and state budget sustainability: Searching a government optimum solution to the pension system in Indonesia

A trade-off between old-age financial adequacy and state budget sustainability: Searching a government optimum solution to the pension system in Indonesia

POSA218 Hospital Exemptions for Atmps: Friend or Foe for Pharma?

Hospital exemption (HE), under EU Regulation (EC) No 1394/2007 Article 28(2), allows for production of unlicensed advanced therapy medicinal products (ATMPs) custom-made for individual patients for use in a hospital setting on a non-routine basis. For patients with unmet clinical needs, HEs grant access to unlicensed, potentially life-saving therapies. Although HE’s increase access to innovative treatments, open interpretation of legislation by national authorities could foster different motives and capacity for ATMP production, encroaching on the traditional pharma model. In conducting a targeted literature review, national differences in HE interpretation, motivation, and scale of use were investigated. Case studies examining past product market withdrawals, successful collaborations between academia and industry, and disruptive innovation were analysed to discern the risks and opportunities faced by industry. There are variations in how countries interpret HE regulations, with some imposing additional requirements for use. This results in inconsistencies across countries in the application of HE, especially in relation to large scale production. Additionally, HE use is increasingly encouraged through policy, with national payers viewing this as a means to drive innovation and reduce treatment costs. From an industry perspective, HEs could potentially be exploited by institutions to circumvent the centralised market authorisation process and produce therapies at lower costs, leading to unfair competition and the creation of a fragmented market. As such, industry is pushing for greater transparency and restrictions on ATMP production under HE. A paradigm shift is already occurring, regardless of objections from industry. With governments and healthcare authorities believing that tighter regulation may harm innovation and lead to decreased patient access, alternative solutions have become imperative. Accordingly, industry must find approaches to collaborate with academia and key centres to leverage rapid innovation, and get treatments to patients earlier whilst ensuring budget sustainability for healthcare systems.

The system of indicators of the financial stability of the local budget as a component of the assessment of the competitive immunity of the region

The article examines the essence of competitive immunity and gives the main stages of evaluating the competitive immunity of the region. There are three blocks for assessing the competitive immunity of the region: information and digital approach; information and digital technologies; value and reputation management. In accordance with the selected blocks, the objects of management influence necessary for assessing the competitive immunity of the region and bringing it to sustainable functioning are defined, namely: production sustainability, financial sustainability, socio-economic sustainability, informational and psychological sustainability, market sustainability, sustainable innovative development, growth of business value, balanced innovative infrastructure and reputation of the region. For one of the important objects of managerial influence, namely, financial stability, a system of indicators of a comprehensive analysis of the financial stability of the local budget as a component of competitive immunity is proposed, which should be considered in three groups: analysis of the balance of the local budget, analysis of financial stability and analysis of budget efficiency. The proposed ratio complex consists of twelve indicators, namely: coefficient of budget coverage, coefficient of budget sustainability, coefficient of general tax stability, coefficient of cost coverage by interbudgetary transfers, coefficient of budget dependence, coefficient of tax independence, coefficient of stability of the income base, the share of equalization grants in the total amount of transfers, local budget deficit ratio, coefficient of budgetary efficiency, coefficient of budgetary support, indicator of stability of the revenue part of the budget. The essence and normative values of the proposed indicators were considered. Within the framework of the proposed approach, the components of the integral indicator of the financial stability of the local budget are considered. The essence and algorithm of the work of Kohonen's neural networks with the aim of its further use for the segmentation of regions based on indicators of financial stability of regions are given.

International experience of long-term budget projections: national and subnational levels

The subject of the research is the approaches used in foreign experience in the formation of forecasts of budget parameters for the long term. The study aims to determine the quality criteria for national and regional long-term budget projections based on the best practice of developed countries. In foreign practice, the question of choosing preferable solutions for long-term budget projections remains open. In Russian studies, some of the above issues are highlighted as of the first decade of the 2000s and require updating, and the foreign regional experience on the use of the longterm budget forecasting lacks detailed analyses. This substantiates the relevance of this study. The novelty consists in highlighting the list of “best practices” in implementing long-term fiscal projection for the national and subnational levels based on the study of the experience of foreign countries. To achieve this goal, the author uses methods of a comparative analysis of international experience in building budget forecasts, system analysis, and analogy. As a result, a list of criteria that meet the good practices of developing long-term budget forecasts has been formed. It is proposed to determine the forecasting horizon within 30–50 years, generate forecasts annually or with a specified frequency if there is a mechanism for updating them. The authors conclude that developing forecasts on a scenario basis using the principle of continuity in relation to the estimates obtained and forecasting methodology, as well as assessing the sensitivity of budget parameters to exogenous factors and budget sustainability are necessary characteristics of longterm budget projections. Prospects for the study consist in studying methodological solutions for forecasting budget parameters and developing tools for the regions of the Russian Federation for calculating indicators of long-term budget projections.

Financial sustainability as a factor of forming fiscal space of local budgets

The purpose of the research is to deepen the theoretical foundations of financial stability as a factor in shaping the fiscal space of local budgets and substantiate the methodological tools for assessing the financial stability of local budgets of Ukraine in the medium and long term. Methods. The following research methods were used in analysing the problem: induction, deduction, system approach, statistical analysis, logical generalization, graphical method. Results. Fiscal extension gives the opportunities to local authorities to obtain and use extra budget resources for achieving the goal taking into account the restrictions caused by the necessity to maintain the financial sustainability in mid- and long-term periods. A methodological toolkit for assessing the financial sustainability of local budgets in mid- and long-term periods is proposed. The complex of arguments for the appropriate applying of the estimation of financial sustainability of local budgets in the national practice using the methodology of the European Commission in the mid-term period is given. It is substantiated that the development of strategic directions for ensuring the long-term financial sustainability of local budgets in Ukraine should take place with the use of foresight. It is substantiated that the fiscal space provides opportunities for local governments to obtain and use extra budgetary resources to achieve a certain goal, taking into account the constraints due to the need to maintain financial stability in the medium- and long-term periods. Methodical tools for assessing the financial stability of local budgets in the medium- and long-term periods are proposed. A set of arguments on the expediency of applying the methodology of the European Commission in the medium-term period in the native practice of calculating the financial stability of local budgets is presented. It is substantiated that the development of strategic directions to ensure long-term financial stability of local budgets of Ukraine should take place using foresight. Practical meaning. The practical significance of the obtained results is in the possibility of using methodological tools to assess the effectiveness of local budget sustainability management by state and local authorities in developing and making management decisions to regulate the level of financial stability of local budgets. Prospects for further research. The formation of theoretical foundations of financial stability as a factor in the formation of the fiscal space of local budgets and substantiation of methodological tools for their assessment in the medium and long term periods confirms the need for further scientific substantiation of strategic directions of long-term financial stability of local budgets in Ukraine under the condition of decentralization.

Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia

Many developing countries are currently facing an ageing population without sufficient preparation for old-age financial adequacy, an important component in active ageing. One question is whether a pension system can create old-age financial adequacy. At the same time, many countries are shifting their pension systems from a defined benefit to a defined contribution pension system to improve the welfare of older people while maintaining state budget sustainability. Indonesia is not an exception. This paper learns from civil servants in Indonesia, where the retirement payout from the existing pay-as-you-go, defined benefit system is meagre. The system is to be transformed into a defined contribution one. Using a simulation method, this paper examines whether the proposed system will provide a better retirement payout, which is higher than the minimum wage and will allow retirees to maintain their pre-retirement income. This paper concludes that the proposed system alone is not sufficient to create old-age financial adequacy and, therefore, is less able to contribute to active ageing. To improve the retirement payout, among other things, the retirement age should be raised and made optional, and the accumulated savings should be re-invested during the retirement period.

Improving the methodology for assessing the sustainable development of municipalities

The purpose of the article is to assess the level of sustainable development of municipalities and improve the assessment methodology by taking into account the budget sustainability index. The paper defines the concept of sustainable development of a municipality as a process of managing the ecologio-socio-economic system of a municipality that ensure the integral stability of the structure, elements and their connections. The current state of the urban districts of the Republic of Bashkortostan in dynamics in the period from 2015 to 2019 is analysed, the level of sustainability of municipal districts is assessed according to indicators of economic, environmental and social subsystems. The assessment methodology is supplemented by the following indicators of the budget subsystem: overall budget stability; budget deficit/surplus; total solvency; the ratio of accounts payable and local budget expenditures; the ratio of municipal debt and revenue; the level of budget balance.