Public Debt Management Research Articles

MONITORING OF THE PUBLIC DEBT OF UKRAINE UNDER THE CONDITIONS OF MARITAL STATE

Abstract. Public debt exists as an economic and legal phenomenon in most countries of the world, as a rule, it is formed as a result of financing the deficit of the national budget. For countries with effective public debt management institutions, it is an engine of rapid economic development. In many countries, the creation of public debt is associated with the government's attempts to improve the socio-economic conditions of people's lives by modernizing infrastructure, developing education, science, health care, improving social welfare, etc. Public borrowing is a source of investment, a means of reducing the negative impact of external factors, and a fairly effective incentive that helps accelerate the growth of the country's economic potential. Thanks to borrowing, our country received additional resources to meet public needs, overcome а certain technological lag in national development, and outline prospects for economic growth. But on the other hand, such borrowings can become a debt burden, since the economic situation in the country does not allow for effective repayment of debts, which in turn only deepens the country's debt problem. Thus, the main problem of public borrowing, in our opinion, is a real threat of reliance on the state and creditors, which has a stable upward trend. In the conditions of war, national obligations, mainly to foreign countries, are growing rapidly. Inefficient management of public debt can lead to economic instability in countries. In our opinion, an increase in external public debt can lead to a decrease in the state authority of Ukraine in the international economic arena and cause mistrust and doubts about the state's ability to ensure the timely fulfillment of its financial obligations.

Patterns and trends in research on external public debt management

This study undertakes a comprehensive bibliometric analysis of publications pertaining to the external public debt management system. The paper aims to study the evolution of scholarly discourse surrounding the external public debt management domain, highlighting contributions, methodologies, and collaborative networks within the field. The methodology encompasses a multivariate approach, incorporating extensive searches across the three major scientometric databases: Google Scholar (PoP), Scopus (in-built Scopus tools, SciVal), and Web of Science (in-built WoS instruments). The bibliometric analysis extends to contextual, evolutionary, and spatial dimensions, allowing for a comprehensive understanding of the identified clusters. The ensuing clusters serve as a roadmap, categorizing publications based on their contextual relevance, evolutionary trajectory, and spatial focus, which enhances the identification of key works in the field, facilitating a nuanced understanding of the current state of external public debt management research. The synthesis of findings from the content-contextual block emphasizes a primary orientation toward understanding the dynamic interplay between external public debt management and economic development. Furthermore, the contextual-temporal block identifies four distinct stages in the evolution of research focus, highlighting the shifting emphasis over time. A discernible pattern of heightened research activity in external public debt management across various countries in recent decades is revealed through spatiotemporal analysis. The interdisciplinary nature of this field is underscored by the dominance of economics, econometrics, finance, business, management, and accounting in dedicated research.

Global experience in public debt reduction (on example of Sweden, Switzerland, and Iceland)

Public debt reduction is one of the main objectives of budget policy formation in the current crisis conditions. In this regard, the study of the experience of different countries in this area is relevant. Therefore, the aim of the study was to provide recommendations for reducing the debt burden in the Kyrgyz Republic, based on the experience of other countries. The main methods used in the research were historical, comparison and generalisation. The study analysed the factors affecting the reduction of public debt in the Kyrgyz Republic. It was concluded that the components that can help affect the debt burden in the country are inflation, economic development, and a targeted policy of the state to pay debts. It was shown that in the current realities, countries that are successful in this direction most often use the latter approach. In addition, the situation in Sweden, Switzerland and Iceland was analysed directly and the main recommendations were given as to how the Kyrgyz Republic can improve its current situation in terms of debt reduction. These recommendations focused primarily on fighting corruption and improving the situation in the context of institutional development, as well as reducing expenditures to achieve a budget surplus. It was recommended not to increase taxes directly to increase state revenues, but to increase the efficiency of their collection. The data obtained from the results of the study can be used to formulate public policy in the area of public debt and budget management both in the Kyrgyz Republic and in other countries

DYNAMICS OF PUBLIC INTEREST IN PUBLIC DEBT MANAGEMENT IN THE CONTEXT OF ENSURING ECONOMIC SECURITY

The article analyzes the trends in the dynamics of public interest in public debt management in the context of ensuring debt and economic security. The methodology is based on using the Google Trends web tool and the corresponding scale for measuring the popularity of search queries – Google Trends Scale. Using Google Trends line charts, a trend analysis was carried out using the keywords «economic security», «public debt management» and «debt sustainability». The key parameters of the analysis are: 1) timeframe: from August 2019 to August 2024; 2) geographical boundaries: Ukraine and the whole world, with a special emphasis on the EU countries. The article proposes to assess the interest of Internet users within three levels on the GT scale (low (0-29 points), medium (30-74 points) and high (75-100)).

Unlocking Africa’s Financial Prospects in A Digitized Economy: Financial Technologies, Illicit Flows, and Debt Management. The Case of Nigeria

Africa’s financial technology (FinTech) has significantly improved during the last several years as her economy evolved. Nigeria, as a vital part of the continent is undergoing so much as Africa is experiencing. Nigerian economy has undergone significant changes in recent years, particularly with the advent of FinTech. The infrastructure for Illicit Financial Flows, IFFs, evolved as well. To combat or curb IFFs and provide a stable operating environment for the economy, Nigeria must seek to increase transparency in financial decision-making and public debt management. In this study, regression and correlation were employed, together with primary, and secondary data gathered from the National Bureau of Statistics, to assess this subject matter. The aim was to unlock Nigeria’s financial prospects via curbing IFFs and instilling transparency in public debt management by properly deploying of FinTech in Nigeria. According to the results, weak or compromised FinTech are increasing facilitating IFFs, there’s great dearth of digital expertise, the transient nature of digital technology via virtual and traditional banks is obscuring demand for IFFs, regulatory frame is albeit obsolete and finally, there is a call for a multi-national approach. These findings will be helpful for policymakers working hard to rid this country of IFFs and strengthen our public debt management mechanisms. Keywords: Illicit Financial flows, FinTech; debt management; Credibility

Public Debt Management and Sustainable Growth in Nigeria

Public Debt Management and Sustainable Growth in Nigeria

Examining the relationship between public debt and private consumption in European OECD countries (2011–2020)

<abstract> <p>This study examined the impact of public debt on private consumption in 26 European Organization for Economic Co-operation and Development (OECD) member countries from 2011 to 2020. Analyzing data from OECD, World Bank, and International Monetary Fund reports, we employed various statistical methods, including correlation analysis, linear regression, fixed effect, random effect, and the Generalized Method of Moments model via the Arellano-Bond estimation approach. Our findings indicated that public debt, foreign direct investments, inflation, and gross domestic product (GDP) growth positively influence private consumption, while gross fixed capital formation and exports of goods and services have a negative impact. The study underscores the need for careful consideration of the repercussions of public debt on citizens' daily lives, especially in terms of private consumption, emphasizing the crucial need for policymakers to consider the delicate balance between public debt management and sustainable economic growth in OECD countries for shaping effective economic policies that foster responsible debt management to support long-term economic development.</p> </abstract>

European sovereign debt risk management: The role of a European Debt Agency

This paper proposes the establishment of a European Debt Agency (EDA) as a tool for the efficient management of Eurozone public debt, to address two primary risks: roll-over and sustainability risk. The proposed EDA would price its loans using a transparent formula that would anchor the price to fundamental economic factors. This approach would encourage fiscal discipline among Member States and avoid inefficient costs resulting from market price deviations from fundamentals, without resorting to debt mutualization. In addition, the paper suggests that adopting flexible fiscal rules alongside the EDA could result in a smoother path towards debt stabilization, by mitigating the macroeconomic effects of excessive fluctuations in risk premia. The simulations indicate that this combination could offer a comprehensive strategy for managing sovereign debt in the Eurozone that would promote fiscal responsibility and stability.

INCOMPATIBILITY OF PUBLIC DEBT AND INNOVATION AS A PARADIGM OF MODERNITY

The relevance of the study is driven by the importance of public debt as an indicator of a country's financial stability and its significant impact on economic development. Meanwhile accumulation of state debt gradually lost the obviousness of the negative in the assessment of the economic health of states. The aim of the article is to analyze one of the arguments for such a determination, namely, that in conditions of dynamic economic growth, public debt can act as a factor in promoting innovative development. The methodological basis of the study is the application of the cluster analysis and curve testing in the framework of regression analysis. The research findings demonstrate no such relationship was found. At the same time, the existence of a short-term positive effect of the use of public debt for economic added value is shown. The prospects for further research lie in examining the methods of effective public debt management to guarantee economic recovery in combination with innovative development in Ukraine.

Public debt from the viewpoint of national security and sovereignty

The paper examines public debt from the viewpoint of national security and sovereignty. The current situation with public debts in different types of countries is revealed. The risks, challenges and threats in the public debt sphere are presented. Different forms of public borrowings, such as loans from international organizations and banks, issuance of the securities on the domestic and international markets were analyzed. It was shown, that the international credits are characterized by the conditionality. In the case of borrowing on the open market using securities, the debtor depends on the current market conditions and can face significant deterioration of the situation. It was proved, that no form of borrowing is free from potential problems. The suggested classification of risks, challenges and threats can be useful for the efficiency of the public debt management.

Reviewing The Impact of International Financial Reporting Standards and Audit Committee on The Financial Reporting Quality.

The purpose of this review article is to examine the impact of International Financial Reporting Standards (IFRS) along with audit committee on the financial reporting quality. The theoretical and experimental studies that were conducted were reviewed to determine whether the quality of financial reports had improved or not in a number of countries across the globe. This study emphasizes the importance of the results of previous accounting research studies that show the effectiveness of adopting IFRS and the audit committee in improving the quality of financial reporting, with specific exceptions in some cases. This review article recommends researchers and interested academic and professional bodies to research and shed light on the independent variables and understand their impact on the quality of financial reports by expanding the field of research, especially in those countries that have new experience in adopting international financial reporting standards. Such scientific research would help professional bodies and decision makers identify the advantages and limitations of applying international accounting standards and governance practice such as audit committees. The study also recommends conducting several literature reviews in this field to highlight additional important and influential factors in increasing the quality of financial reports. Keywords: IFRS, audit committee, Financial Reporting Quality.

Effect of Ukraine’s public debt management on its macroeconomic development: VAR modeling

One of the tools of economic policy of any country is efficient public debt management, which influences and determines the dynamics of key macroeconomic indicators. The study aims to assess how public debt management affects Ukraine’s macroeconomic development. The analyzed period includes data of 2015–2021. Econometric modeling is used to establish the existence of causal relationships between the dynamics of public debt and changes in key macroeconomic indicators using the Granger causality test and VAR (Vector Autoregression) model. The obtained results demonstrate that during the study period, the strongest links existed between the public debt and GDP, debt servicing and Ukraine’s total state budget expenditures, public debt and consumer price index, real effective exchange rate index of the hryvnia to the US dollar, and political stability index. At the same time, the calculations proved that public debt does not have a significant impact on foreign direct investment and the level of imports of goods and services. The proposed model allows for forecasts for future periods and can be used in developing public debt management policy.

Minding the gap: China contesting norms for public debt management?

This article addresses the questions of whether, to what extent, and how China contests the norms and practices for public debt management in developing countries as currently preferred by the Group of Seven (G7) and G7-led multilateral institutions. More specifically, it considers three norms: debt sustainability, debt transparency and conditional debt relief. To that end, I elaborate a norm contestation typology and apply it to analyse how China discursively contests these norms. Equally, I contrast China’s rhetoric with its actual behaviours. Two findings emerge from the analysis. First, there are notable efforts by China to contest the three norms, with Chinese officials emphasising a qualitatively distinct understanding of debt sustainability and debt transparency and the appropriateness of non-conditionality and equality in the provision of debt relief. Second, there is an apparent disjunction between China’s words and actions, with its actual lending and debt relief practices (becoming) more aligned with what is currently preferred or advocated by the established actors.

Specific features of Ukraine’s public debt management in conditions of war

Introduction. The debt policy of the state is essential for ensuring economic sustainability and development of the country. Effective public debt management helps to prevent crises and ensure financial stability, and gives the government more leverage to respond to economic challenges, which is especially important for the Ukrainian economy that is operating in a war time.Purpose. The purpose of the article is to study the peculiarities of public debt management, directly in the context of war, based on a comprehensive analysis of the debt policy instruments used by Ukraine’s government in the current circumstances.Methods. The analysis of cause and effect relationships was used to identify the features that determine the debt policy of our country in the conditions of war. Methods of economic and statistical analysis, such as dynamic analysis, structural analysis, comparison and correlation, were used to analyze and evaluate the main trends related to the public debt management in Ukraine.Results. The article examines the impact of the main factors that have impact on the formation of the state’s debt policy and, accordingly, determine the peculiarities of public debt management in modern conditions. The tendency of Ukraine’s debt obligations growth in the period of 2022-2023 is revealed. It is established that in the structure of debt, external public borrowings prevail over internal ones. It is found that the main debt instrument in the domestic market is government bonds, and in the external market - loans received from international financial organizations. The author substantiates the expediency of using specific instruments in the process of public debt management at the current stage of functioning of the Ukrainian economy, as well as in the post-war period, based on international experience.Prospects for further research include the need to develop an effective strategy for managing public debt in the postwar period in order to create favorable conditions for the reconstruction of the country and further sustainable economic growth.

Public debt management announcements: A welfare-theoretic analysis

Before an auction, public debt managers (DMs) announce the number of bonds to be sold to primary dealers (PDs); however, the empirical evidence suggests that when “beat-the-market” opportunities arise, more bonds than announced are auctioned. A micro foundation for this result resides in PDs’ sale of bonds to uninformed traders, thereby extracting information rents. These rents give rise to two counteracting effects. On the one hand, they create an auction premium that motivates DMs to overissue. On the other hand, they motivate traders to learn the bond value, which increases market expertise, mitigating the auction premium and issuance bias. A credible announcement policy raises welfare by increasing the auction premium, depressing the issuance bias, and reducing traders’ need to invest in market expertise.

Empirical examination of public debt sustainability in African economies: A panel data analysis

This study intends to investigate public debt sustainability across 29 Sub‐Sahara African (SSA) economies, employing various econometric specifications, for the sampled years 1996–2020. The study employs Bohn's (Are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint? Journal of monetary Economics, 54(7), pp.1837–1847.) framework of sustainability as the baseline model to assess public debt sustainability across the sampled Sub‐Sahara African economies. As additional tests of public debt sustainability in order to support the baseline findings, the study also employs panel unit root and timeseries unit tests. The baseline findings from the OLS, panel quantile and instrumental panel quantile regressions show that public debt is sustainable across the panel of SSA economies. The positive and statistically significant response of primary balance under the Bohn's framework of sustainability manifest that the intertemporal budget constraint is not violated in the sampled economies. The consistency in the estimates under the OLS, panel quantile and instrumental panel quantile regressions also show that the estimates are robust throughout the estimation process. Also, utilizing the panel unit root test for public debt sustainability, the findings show that public debt is stationary over the sampled years which implies that intertemporal budget constraint holds and that public debt is sustainable across the sampled SSA economies. However, the timeseries analysis indicate that although majority of the SSA economies have sustainable public debt ratios, four countries namely Uganda, Sudan, Togo and Cote d'Ivoire have unsustainable public debt ratios. The study has important policy implications in terms of prudent public debt management and fiscal management for the sampled SSA economies.

Assessment of Ukraine’s external debt burden under geopolitical instability

Several specific features and circumstances can characterize Ukraine’s policy of external public debt management, and the results are not always unambiguous. The study aims to assess the effect of external public debt on Ukraine’s economy from 2014 to 2022, a period that includes the Crimea annexation, the onset of the COVID-19 pandemic, and the beginning of the open Russian military aggression. To analyze the contemporary state of public debt and assess the degree of external debt burden’s impact on the country’s economy, a factor analysis technique known as the principal components method was used. Via the STATISTICA.12 software, it was substantiated that the debt situation worsens with the growth of debt burden and solvency indicators as their values approach the thresholds. The application of the Kaiser criterion allowed the selection of the most influential indicators (principal components) for assessing the external debt burden. The eigenvalue of the first component (inflation rate) is 4.48, and it explains 50% of the variance; the second component (production of export-oriented goods) has an eigenvalue of 2.43, explaining 27% of the variance; the third component (government spending on military purposes) has an eigenvalue of 1.24, and it explains 14% of the variance.

External public debt management during the wartime: Case of Ukraine

Public debt plays a crucial role in the economic development of many countries, the effective management and servicing of the external public debt have become a priority in the financial and economic policy of the state, ensuring the stability of its development. The article aims to develop Ukraine’s external public debt management system during the wartime. As a result of the analysis, the key negative consequences of the impact of external debt growth on Ukraine`s economic security were determined, i.e. economic growth slowdown, increased dependence on creditors, increased costs of the public debt servicing, significant reduction in domestic consumption, etc. The developed external public debt management system in the framework of state economic and financial security includes relevant subsystems, principles, functions, objects and subjects, methods. It was substantiated that the appropriate external public debt management system during wartime in Ukraine requires the following additional subsystems: subsystem of crisis planning and response, subsystem of external debt settlement and subsystem for ensuring international cooperation.

A stagflation-proof bill of exchange circulation model – Presentation and evaluation

As a continuation of a preceding article discussing liquidity creation based on promissory notes and bills of exchange, the present study introduces how the use of notes and bills can foster the particular economic sectors and public debt management at a time. A financial policy package of measures first suggested by Lautenbach then introduced by Schacht fought off recession and inflation within half a decade in the German economy. We make up for a professional hiatus in the Hungarian economic literature, in that we provide a detailed evaluation of the financial solution of Schacht which has appeared in many forms in the international literature..

Ukraine’s debt security in the context of military conflict

In the context of military conflict, security issues come to the fore in all spheres of state life. As the combat capability of the army largely depends on the financing of its needs, the problem of finding additional financial resources is becoming more acute. However, the economy is currently unable to cope with this task due to the destruction of the material and technical base and logistics routes, military mobilisation of some employees, the outflow of labour resources abroad and other factors resulting from the armed aggression. Therefore, the search for ways to improve debt security in the context of a military conflict is of utmost importance.
 The purpose of the article is to identify the ways to increase the level of debt security of Ukraine's economy. To achieve this goal, the state, dynamics and structure of public and publicly guaranteed debt for 2013–2022 have been analysed. It has been established that over the past ten years, the volume of total public debt has been steadily increasing. This was mainly due to an increase in such components as direct public and external debt. The fastest growth in total public and publicly guaranteed debt was in the years of military operations.
 The analysis of the state debt security indicators has shown a deterioration in the state of debt security and the approach of a debt crisis. Due to the significant complication of the conditions in which Ukraine's economy has been operating over the past year, it is proposed to revise the Medium-Term Public Debt Management Strategy for 2021–2024 to define new targets and approaches in this area. Currently, the Ministry of Finance's main task is to restructure domestic and external debt.
 In order to increase the level of debt security of Ukraine, it has been proposed to initiate the development of an international protocol for debt cancellation for countries affected by armed aggression. In the course of domestic debt restructuring, it has been suggested that the yield on domestic government bonds should be reduced, but this can only be done if monetary policy is changed.