State Of Public Finances Research Articles

Міжнародні стандарти статистики державного боргу та їх впровадження в систему управління державними фінансами України

Міжнародні стандарти статистики державного боргу та їх впровадження в систему управління державними фінансами України

Improving the methodology for assessing models of public debt management in Kazakhstan

One of the macroeconomic instruments of state activity is the public debt. For the stable functioning of the state, the fulfillment of all strategic goals and the fulfillment of obligations assumed, the state attracts borrowed funds, distributing them to finance the relevant budget expenditure items. The state of public finances is influenced by numerous parameters of the country's macroeconomic policy, including, of course, the level of public debt, the policy of the state in terms of its management. In world practice, the use of government borrowing is widespread to ensure a balance of budget revenues and expenditures. State borrowing is inherent in all countries of the world, and this is the norm in current realities, and the Republic of Kazakhstan is no exception. The amount of public debt varies significantly from country to country. In some states, this is a significant ratio of public debt to GDP, while in others it is low. In this regard, the question of effective management of public debt and the impact of public debt on the economic security of the country logically arises. Effective public debt management assumes that the state has the ability to control the volume of its debt obligations, the main parameters of financial stability, such as the stability of the stock and financial markets, regulate economic processes, as well as establish the necessary norms and rules for the functioning of public debt.

BP Neural Network Algorithm Based on Big Data for Monitoring and Early Warning of China’s Public Finance

Public finance plays an important role in the development and construction of the country. Public finance is derived from and used by the people. On the one hand, public finance mainly comes from national taxes and the income of some state-owned enterprises or state-owned assets. On the other hand, public finance is used for national infrastructure, military investment, scientific and technological research and development, national daily operation, and other expenses. Therefore, the state of public finance is closely related to people's lives, and it is also one of the basic symbols of a country's prosperity and strength. How to ensure that the country's public finance is in a good state, grasp the leverage balance of public finance revenue and expenditure, and avoid the situation of national “bankruptcy” is additional attention that the public finance department should pay in the process of operation. Therefore, we urgently need a set of public finance monitoring and early warning system that matches China's public finance operation mechanism and conforms to China's basic national conditions. At present, previous studies rely on the existing detailed data on public finance to measure the situation of China's public finance, but this method refers to fewer data and is not forward-looking enough. Therefore, this paper adopts a BP neural network algorithm to monitor and warn the situation of China's public finance based on computer big data.

Оцінка сучасного стану державного боргу України

The article is concerned with assessing the current state of public debt and the State-guaranteed debt of Ukraine, their essence is considered and the dynamics for the period 2017-2021 are analyzed. It is noted that public debt is the result of the movement of borrowed capital, which has a significant impact on the state of public finances, the investment climate, money circulation, and the development of international cooperation. It is determined that a significant amount of public debt, which was formed during the period of Ukrainian independence, negatively affects the economic situation in the country, and debt servicing creates a burden on the State budget. At the moment, the debt policy needs to find improved ways to attract credit funds and identify effective ways to use them to better the financial situation and strengthen Ukraine’s economy. The article defines the structure of the State debt of Ukraine in terms of foreign currencies. It is proved that the debt mostly consists of borrowings denominated in foreign currencies. An analysis of both the public and the State-guaranteed debt by type of interest rates during the analyzed period was carried out and it was noted that borrowings include a significant share of debt instruments with a fixed rate. The structure of the public debt by type of creditor during 2017-2021 is presented. It is proved that issued securities in the domestic and foreign markets occupy the largest share in the structure of the debt. The economic essence of domestic and foreign government bonds is defined. Domestic government bonds (OVDPs), which are in circulation at nominal depreciation value during 2017-2021, are considered in terms of foreign currencies and owners. Based on the carried out analysis, the main reasons that led to the growth of the volume of both the public and the State-guaranteed debt in Ukraine and the directions of their optimization in public debt management are identified.

Напрями перегляду системи пільг з ПДВ в Україні

In the conditions of searching for ways to fill the state budget, reforming the system of VAT reliefs, losses from which make up more than 70% of total losses from tax benefits in Ukraine, can be an effective alternative to raising tax rates. The purpose of the article is to determine the directions of revision of the system of VAT reliefs in Ukraine in the context of the implementation of the Association Agreement with the European Union and its Member States. The subject of the study are two forms of reliefs – exemptions from tax and the use of its reduced rates. In addition, validity of qualification of the operations specified in Art. 196 of the Tax Code of Ukraine, as those that are not subject to VAT taxation, is considered, and it is established how one or another transaction should be qualified in accordance with Council Directive 2006/112/EC. A comparative analysis of VAT reliefs in Ukraine and the EU countries has shown that in addition to exemptions similar to those provided in the Council Directive 2006/112/EC, the Tax Code of Ukraine includes exemptions from transactions that are allowed to be taxed with the Directive at reduced rates, as well as exemptions which are not provided by the Directive. On the other hand, some mandatory exemptions under Council Directive 2006/112/EC do not apply in Ukraine. There are certain inconsistencies in the definition of transactions, the taxation of which at reduced rates is provided in the Tax Code of Ukraine and in Council Directive 2006/112/EC. The established differences determine the possible directions of revision of the system of VAT reliefs in Ukraine. However, its real scale may be different. Ukraine can go both by minimizing the system of tax preferences by refusing not only the exemptions which are not provided by the Council Directive 2006/112/EC, but also by transforming certain exemptions into taxation at a reduced rate, and by maximizing the opportunities for preferential taxation provided by the Directive. It is concluded that the choice of a certain kind of path will be influenced by the following factors: uncertainty of Ukraine’s accession to the EU, which puts our country not in such a rigid framework in the context of compliance with EU legislation as candidate countries; the state of public finances in our country: the need to expand the fiscal space and the possibility (their absence) of its expansion at the expense of sources not related to tax benefits; the presence of political will at the leadership of the state to optimize tax preferences.

THEORY AND PRACTICE OF RUSSIAN PUBLIC DEBT MANAGEMENT

The article considers the approaches to public debt management in Russia, describes the time requirements for the use of various tools. The paper evaluates the dynamics of changes in public debt and its transformation, which consists in the transition from external to internal borrowing. The author denotes problems in the field of underfunding of budget expenditures in connection with the coronavirus pandemic. The study considers all known theories of public debt management and presents the mechanism of their implementation and their impact on the state of public finances. The author makes a summary of the necessary approaches and solutions in the field of borrowing and debt servicing. The paper also presents the direction of changes in the legislation in the field of setting service limits and the total amount of borrowing.

ОТНОШЕНИЯ ЕВРОПЕЙСКОГО СОЮЗА И ИТАЛИИ В КОНТЕКСТЕ НАДНАЦИОНАЛЬНОГО ФИСКАЛЬНОГО РЕГУЛИРОВАНИЯ

The article presents a retrospective analysis of relations between the government of Italy and the European Union institutions in the context of supranational fiscal regulation in 2002–2019. The authors analyze the influence of external and internal factors on the state of public finance in Italy, note the reasons that made it difficult to meet the requirements of the Stability and Growth Pact, study the main issues on the agenda in the EU-Italy relations and their evolution. The authors also come to conclusion that unlike the earlier discussions about correcting budget deficit in Italy, current focus of supranational fiscal governance is shifted to preventing it, what challenges the economic sovereignty of Italy and country’s opportunities to conduct a discretionary fiscal policy.

SUBSTANTIATION OF PRIORITY OF ACHIEVING THE GOALS OF SUSTAINABLE DEVELOPMENT IN THE IMPLEMENTATION OF FISCAL POLICY

Introduction. With the approval of the global process of sustainable development increases the need for its research support. In this context, it is important to systematically use the instru ments of fiscal policy in achieving the goals of sustainable development, which will have a positive effect not only on a global scale, but also improve the socio-economic situation in Ukraine. The purpose of the article is to investigate the relationship between fiscal policy and sustainable development, to argue the priority of using the tools of fiscal policy in achieving the goals of sustainable development, as well as to assess the effectiveness of their use in achieving these goals. Methods. In the exploration of fiscal policy to achieve the goals of sustainable development used general and special methods, namely: comparison, grouping, graphical and tabular analysis. Results. It is substantiated that fiscal policy has a significant potential in ensuring sustainable development, being a kind of public policy, it has an impact on socio-economic processes taking place in the country. It is argued that in Ukrainian practice the use of fiscal policy tools does not provide progress in achieving sustainable development goals. The use of tax and expenditure regulation, as well as the instrument of debt finance occurs in the absence of a strategy for their coordination and subordination to the same target parameters. This leads to growing social gaps and imbalances, worsens the economic situation and the environment. It is proved that achieving the goals of sustainable development will help to improve the socioeconomic situation in Ukraine and the state of public finances. Perspectives. Further research should be aimed at finding ways to achieve defined global goals of sustainable development by rationalizing of government decisions on the synergistic use of fiscal policy instruments.

Transformation of Public Finance of the Eurasian Economic Union Member States in the Context of the COVID-19 Pandemic

Purpose: The article sets the following objectives: considering the economic nature of the current crisis, its differences from the economic crises observed in the past few decades, the measures taken by the member states of the Eurasian Economic Union to fight coronavirus infection and the directions for improving financial, budgetary, tax , customs regulation in crisis conditions. Design/Methodology/Approach: Right after the start of the coronavirus pandemic, most countries of the world have implemented a similar set of measures to minimize its negative consequences. The article examines the financial and credit instruments used in world practice to stabilize the socio-economic situation and eliminate the consequences of the COVID-19 pandemic, the possibilities and limitations of their use by the Eurasian Economic Union (EAEU) member states. Findings: Overcoming the consequences of the economic crisis caused by the coronavirus pandemic and ensuring the economic growth of the EAEU member states is possible through the deepening of integration processes within the EAEU and the Shanghai Cooperation Organization (SCO), the creation of the necessary conditions for the digitalization of foreign and mutual trade of the EAEU member states, changes in the current monetary policy its close coordination within the framework of resolving the issue of developing the internal financial market of the EAEU. Practical Implications: The practical implementation of the proposed approaches will minimize the negative consequences of the economic crisis caused by the COVID-19 pandemic for the EEU member states. Originality/Value: The rapidly changing macroeconomic and financial situation has a negative impact on the state of public finances around the world, which requires taking newly emerging fiscal risks into account and developing economic and financial measures to eliminate the consequences of the COVID-19 pandemic. Coronavirus infection has led to a disruption in the activity of certain sectors of the economy, a decrease in the final demand for manufactured products and / or services, a disruption of inter-industry relationships and production chains.

State budget deficit in the context of national security of Ukraine

The article considers the state budget deficit as a key indicator of Ukraine’s budget security. The main threats of the state national security in the economic sphere, their preconditions and consequences, as well as the impact on the state of public finances and processes of external migration of the population are investigated. The role of the Pension Fund of Ukraine in the process of forming the state budget deficit of Ukraine is analyzed. It is proved that each of these threats is a systemic destructive phenomenon that negatively affects the state’s economy and has direct or indirect impact on public finances and, in particular, on the level of budget security. It is substantiated that an adequate level of budget security is a basis for the protection of national interests’ formation of Ukraine and sustainable development of the national economy. It is noted that the overall effect of the totality of all threats (latent, explicit, potential, direct and indirect) to the national security of Ukraine is quite clearly traced when analyzing the state of public finances in general and the nominal volumes and dynamics of changes in the state budget deficit as a percentage of GDP. It is determined that the calculations of indicators of Ukraine’s budget security assessment and comparison of obtained results with their normative values prove that there is a threat to the financial and economic system of the state due to large amounts of government debt and excessive amounts for their repayment and servicing. The main reasons for the deviation from optimal values of the level of redistribution of GDP through the consolidated budget, the ratio of total payments for servicing and repayment of public debt to state budget revenues as the most critical indicator of budget security. A set of measures for minimizing the negative impact of systemic threats in the economic sphere on the state of public finances and the level of national security of the state is proposed

The economy of the regions of Ukraine under the influence of the challenges of the COVID-19 pandemic

The pandemic caused by the COVID-19 has changed the trends of the world and domestic economy, the state of public finances, socio-cultural life of the population. The conditions for implementing the reform of administrative and financial decentralization initiated in the country have become more complicated. In such conditions, the growing epidemiological resilience of territorial communities is the most important competitive advantage of their development. The aim of the article is to study the development trends of Ukraine’s economy at the regional and local levels under the influence of the COVID crisis, to identify ways to overcome its negative consequences for the economy of regions and territorial communities. Methods. The following methods were used for the study: abstract-logical, comparative analysis, graphical visualization, statistical. The article analyzes the negative trends in the economy of the regions under the influence of quarantine measures introduced in connection with the COVID-19 epidemic: declining economic activity of industrial and agricultural enterprises, investment, regions’ export-import, and state and local budget revenues. The negative social effects of quarantine measures have been identified: a decrease in the average wage and the level of employment, an increase in the number of forced leave without pay. The article describes the features of state regulation of business activities in an epidemic and their impact on the content of state and local budgets. The paper emphasizes that the accelerated endogenous economic growth of territorial communities and the involvement in the economic turnover of resources not yet involved and their transformation into development assets is the way out of the situation. Ways of reorientation of business and state support of territorial communities are offered.

Wpływ reguły wydatkowej na typ polityki fiskalnej w Polsce

<p><strong>Uzasadnienie teoretyczne:</strong> Przedstawienie polskich doświadczeń z wprowadzaniem reguły wydatkowej do krajowego prawa pod wpływem regulacji unijnych.</p><p><strong>Cel artykułu:</strong> Wykazanie, że modyfikacja reguły wydatkowej z 2015 r. skutkowała utratą jej stabilizującego charakteru, który miał stanowić jej główną właściwość.</p><p><strong>Metody badawcze:</strong> Identyfikacji zmian w nastawieniu w polityce fiskalnej w latach 2013–2018 dokonano na podstawie zmian w ujęciu rocznym salda pierwotnego dostosowanego cyklicznie względem luki produkcyjnej.</p><p><strong>Główne wnioski:</strong> Przeprowadzone w pracy analizy wykazały, że reguła wydatkowa funkcjonująca w pierwotnym kształcie sprzyjała łagodzeniu wahań koniunkturalnych. Wraz ze zmniejszeniem restrykcyjności reguły wydatkowej w 2015 r., polegającej na zastąpieniu w formule wskaźnika prognozowanej inflacji wskaźnikiem średniookresowego celu inflacyjnego, jej funkcja stabilizująca została zatracona. Stwierdzono, że dobrze skonstruowane numeryczne reguły fiskalne mogą być ważnym instrumentem zachowania kontroli nad stanem finansów publicznych, lecz doświadczenia z regułą wydatkową w Polsce dostarczają wielu argumentów przeciwnikom stosowania reguł numerycznych w polityce fiskalnej.</p>

IMPACT OF PENSION SYSTEM REFORMS ON PUBLIC FINANCE EXPENDITURES IN POLAND

System zabezpieczenia społecznego w każdym kraju, jeśli istnieje, odgrywa kluczową rolę we wspieraniu obywateli, jednocześnie stanowi duże obciążenie finansowe dla wydatków budżetowych państwa. W Polsce składa się on z systemu ubezpieczeń społecznych i opieki społecznej, systemu ubezpieczeń zdrowotnych, zasiłków dla bezrobotnych i świadczeń rodzinnych, z których wyliczono emeryturę, rentę inwalidzką, ubezpieczenie chorobowe i macierzyńskie, ubezpieczenie od wypadków przy pracy i choroby zawodowe i ubezpieczenie zdrowotne. Celem artykułu jest przedstawienie zmian, jakie zaszły w polskim systemie emerytalnym w latach 1999–2017 oraz wpływu tych zmian na wysokość wydatków publicznych. W badaniu dokonano weryfikacji hipotezy badawczej: często występujące zmiany w systemie emerytalnym mają negatywny wpływ na stan polskich finansów publicznych. Badaniem objęto lata 1999–2017. Podstawowymi materiałami badawczymi wykorzystanymi do przeprowadzenia analizy badań były sprawozdania z realizacji budżetu państwa, dane przygotowane przez Zakład Ubezpieczeń Społecznych oraz dane statystyczne uzyskane z Głównego Urzędu Statystycznego.

Conceprual approaches to the public debt management and its impact on financial stability

Management and regulation of public debt for many years is an urgent problem of the functioning of the financial system of the state, as it is a component of the financial systems of the vast majority of countries. In this regard, the priorities and areas of the debt policy, in the framework of which the formation and servicing of public debt are gaining particular importance. Public debt plays a significant and multifaceted role in the macroeconomic system of any state, since relations regarding the formation, servicing and repayment of public debt have a significant impact on the state of public finances, monetary circulation, the investment climate, the structure of consumption and the development of international cooperation between states. For the Republic of Kazakhstan, the problem of improving the public debt management system and its impact on financial stability is relevant because its solution requires research and the search for radically new mechanisms in the context of the transformation of the economic system into a market one, which is associated with increased economic risk.The purpose of the study is to identify the main trends in the system of managing state external borrowings of the Republic of Kazakhstan, to analyze theoretical studies of foreign and domestic authors, as well as solutions to formulate recommendations for improving the efficiency of external debt management and its impact on the financial stability of Kazakhstan. The theoretical and methodological basis of the study was the development of domestic and foreign economists, laws and regulations governing economic and social processes in this area. The information base of the study was the work of domestic and foreign scientists and specialists in the field of public debt, official statistical and informational materials of the Ministry of Finance of the Republic of Kazakhstan, data of the National Bank of the Republic of Kazakhstan, data of the Ministry of National Economy of the Republic of Kazakhstan, statistical collections and Internet resources.

Making Budgets Attractive: Best Practices From Government’s Financial Transparency Portals

Fiscal transparency is defined by the IMF as “the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting on the past, present, and future state of public finances”. For journalists, parliamentarians and citizens alike, fiscal transparency can mean an unobstructed view into the financial affairs of the state. But, what does that mean concretely? How does one do ‘fiscal transparency’? As it turns out, the starting point for this potentially empowering concept lies with open spending platforms, usually in the form of websites containing fiscal data. They are the key interfaces between data suppliers and users, and the result of policy makers carefully navigating a plethora of challenges ranging from data quality and compatibility to varying accounting systems and legal contexts. This paper, developed as part of the H2020 OpenBudgets.eu project, presents the results of conversations with creators and proponents of open spending portals, both to better understand its pitfalls and to formulate best practices.

Загрози фінанcовій бeзпeці України в умовах гібридної війни

The article explores theoretical, methodological and applied aspects of strengthening Ukraine’s financial security in the conditions of hybrid war. The financial security is shown as one of the key elements of economic security with the state of public finances being directly related to the status of the national economy while the country’s economic welfare depends largely on the level of financial security provided to every individual, the society and the nation as a whole. To study this hypothesis, a system of general and special methods is used as a theoretical and methodological basis, namely, the dialectical method of cognition is used to evaluate the theoretical and normative principles of understanding financial security in the structure of a country’s national and economic security; methods of causal analysis are used to directly analyze the functioning of financial security in modern conditions of development of Ukraine; comparative analysis methods are used to study the similarities and differences between various elements of the state’s national security structure.

Linking Bank Crises and Sovereign Defaults: Evidence from Emerging Markets

We analyze the mechanisms through which bank and sovereign distress feed into each other, using a large sample of emerging market economies over three decades. After defining “twin crises” as events where bank crises and sovereign defaults combine, and further distinguishing between those bank crises that end up in sovereign defaults and vice versa, we study what differentiates “single” and “twin” events. Using an event analysis methodology, we document systematic differences between “single” and “twin” crises across various dimensions including the balance sheet interconnection between banks and the sovereign, banking sector characteristics, the state of public finances, the macroeconomic environment and financial openness. The importance of these characteristics in shaping the transmission of stress between banks and sovereigns is confirmed by two alternative discrete-variable multivariate approaches. We also show that “twin” crises themselves are heterogeneous events: taking into account the actual time sequence of crises that compose “twin” episodes is important for understanding their channels of transmission and economic consequences. These findings inform the flourishing theoretical literature on the mechanisms surrounding feedback loops of sovereign and bank stress.

Poland facing development challenges

The main threat to the economic development of Poland is the danger of overlapping of two processes – the decline in the growth of the working age population and the outflow of young, talented and educated people to richer countries. Therefore, the most important goal of the economic policy should be rapid making up the gap to the average EU level. This can be impeded by the current state of public finances, due to high level of debt. Moreo-ver, there are also other factors, which under certain conditions, may lead to a cumulative negative effect, which in turn would threaten the financial stability of the budget. At the same time, the bases of competitiveness of the economy gradually expire, which requires transition to the competition of a qualitative nature. According to the Author, an oppor-tunity to avoid the threat is to use the global market more extensively. He suggests public innovation in a form of the so-called smart company incubators.

Shock and awe? Fiscal consequences of terrorism

This article investigates how the frequency and severity of terrorism affect government finances in a large sample of 156 developed and developing countries over the period 1970–2016. The empirical results indicate that terrorism has a negative effect on tax revenue performance, especially in countries where terrorism has become endemic with frequent attacks and large numbers of fatalities relative to population, and that this effect becomes more pronounced in dynamic models accounting for potential endogeneity. Similarly, controlling for a plethora of economic, demographic and institutional factors, we find compelling evidence that terrorism is associated with a significant increase in military spending as a share of national income. These effects of terrorism on government operations and finance appear to be greater in countries where attacks are frequent and result in large numbers of fatalities. Our empirical findings also confirm that the state of public finances in developing countries is more vulnerable to acts of terrorism than those in countries that are richer and more diversified.

The condition of public finances and its impact on the level of inflation in Poland in 2011-2017

The aim of the article is to present the condition of the main elements of public finances: public finance deficit (budget deficit), public debt (state treasury debt) and public expenditure (budget expenditure) in Poland in 2011-2017 and on the basis of the described theoretical dependencies to determine their impact on the level of inflation during the period considered. The following methods were used in the research: analysis and logical construction and statistical methods.
 It was found that the state of public finances did not cause inflationary pressure in the analysed period. Inflation remained at a low level, with a tendency to transform into small deflation in some years. However, the abrupt increase in public spending in 2017 could be, according to the theory of economics, responsible (or partly responsible) for the increase in inflation in 2017. Maintaining a high rate of public expenditure growth may stimulate inflation in subsequent periods.