Issue #3 (Volume 15 2026)

Type of the article: Research Article

Abstract
The purpose of this study is to assess the relationship between tax burden, income, and the level of poverty in rural areas of Kazakhstan. Panel regional data are analyzed for the period 2010–2024, obtained from the Bureau of National Statistics of Kazakhstan and the State Revenue Committee. The methodological framework includes regression analysis and econometric modeling. Five models were constructed showing that the growth of the gross regional product has a positive association with the incomes of the rural population (β = 0.927, p < 0.001). On the contrary, the relationship with the tax burden is statistically insignificant (β = 0.001). The study showed that before the 2018 tax reform, the fictitious indicator was β = –0.014; after that, β = 0.251, indicating a structural shift in household incomes of about 25–29%. The regional resource-based model shows that in non-oil regions, the tax burden is positive (β = 0.014), whereas in oil regions, it is statistically significant but negative (–0.021). The results suggest that higher GRP levels are not statistically associated with corresponding improvements in rural income indicators and poverty rates. In these cases, it is necessary to undertake comprehensive actions to improve the social well-being of the rural population, including strengthening the institutional environment, promoting regional economic development, and ensuring equitable distribution of benefits from economic growth.

Type of the article: Research Article

Abstract
This study aims to analyze the effect of government budget on tax compliance, with tax fairness and public trust as mediating variables. This study used a sample size of 200 respondents, based on the minimum sample size criteria for partial least squares (PLS-SEM), inverse square root, and gamma-exponential methods. To strengthen the robustness of results, a bootstrapping method with a subsample of 5,000 was used in hypothesis testing. The survey was conducted with 200 individual taxpayers. The results show that the government budget has a positive effect on tax compliance with a coefficient of 0.233. Tax fairness has a positive effect on tax compliance, with a coefficient of 0.573. The results show that government budget expenditure positively affects tax fairness and has a positive indirect effect on tax compliance through tax fairness at the 10% level. The results also show that the relationship between budget expenditure and public trust is negative and statistically significant (β = –0.170, p = 0.036). Government budget positively affects tax fairness and has a positive indirect effect on tax compliance through tax fairness, marginally significant at the 10% level. The IPMA analysis results indicate that tax fairness has the highest importance and performance, while the government budget ranks the lowest. The practical value of this research is that the government must implement a fair taxation system, as it is the primary determinant of tax compliance.

Type of the article: Research Article

Abstract
Provincial financial assistance is a distinct but under-examined tier of Indonesia’s intergovernmental transfer system, sitting alongside the national village fund and the regency village fund allocation. This is a theoretical policy analysis of the design of West Java’s provincial assistance to villages in Bogor Regency, a flat grant of IDR 130 million per village. The aim is to assess, against fiscal federalism and administrative burden theory, whether a uniform per-village transfer is an appropriate design for a recipient population that is highly heterogeneous in development status. The analysis draws only on official regulations, budget records, and published statistics for 2017–2025, with no primary survey or interview data. Three design properties are examined: the allocation rule, the disbursement procedure, and the participation channel. The analysis shows that the flat rule directs a proportionally smaller fiscal share to lower-capacity villages than to higher-capacity ones, that the multi-step disbursement procedure generates an administrative burden disproportionate to the grant’s modest size, and that no regulation between 2017 and 2025 provides any channel for villages to participate in setting the amount, the earmarks, or the procedure. The grant equals only about 13.8% of the average national village fund, yet imposes a comparable compliance load. The study concludes that the appropriate reform is not a larger grant but a redesigned one: a basic-plus-need allocation formula, a simplified and digitalized disbursement process with a binding calendar, and an institutionalized consultative forum. The framework is transferable to other provinces operating uniform village grants.

Type of the article: Research Article

Abstract
The growing importance of renewable energy in ensuring energy security and sustainable development has increased attention to the role of public finance, particularly at the regional level. This study aims to assess whether different categories of regional public expenditure are associated with renewable energy development in Ukraine, distinguishing between installed capacity and electricity generation. The analysis is based on a balanced panel dataset for 25 Ukrainian regions over 2018–2021 and applies two-way fixed effects models with lagged specifications and Driscoll–Kraay standard errors. The results show that expenditures on electric transport exhibit the strongest positive association with installed renewable energy capacity (β ≈ 0.078, p < 0.001), followed by SME support (β ≈ 0.025, p < 0.001), other environmental activities (β ≈ 0.017, p < 0.001), and natural resource management (β ≈ 0.013, p < 0.001). In contrast, most general economic expenditures are not statistically significant, suggesting that these expenditure categories are not statistically associated with higher renewable energy development within the analyzed period. For renewable electricity production, contributions to the statutory capital of enterprises are positively associated (β ≈ 0.006, p < 0.05), while co-financing of investment projects is negatively associated (β ≈ −0.027, p < 0.001), reflecting implementation lags. Additionally, capital investments in environmental protection are negatively associated with renewable electricity production (β ≈ −0.072, p < 0.001), suggesting that installed capacity expansion differs from renewable electricity production.

Acknowledgment
The authors acknowledge funding from the Swiss National Science Foundation (SNSF) [Grant No. IZURZ1_224119]. The authors bear sole responsibility for the conclusions and results of the research.

Type of the article: Research Article

Abstract
This study examines Somalia’s post-debt relief governance and debt sustainability to identify the institutional and fiscal reforms needed to preserve debt sustainability in fragile states. This study adopts a mixed-methods approach that combines a qualitative systematic literature review with a debt sustainability analysis by using the IMF-World Bank Low Income Country Debt Sustainability Framework (LIC DSF). Somalia’s debt position improved markedly after HIPC relief: external debt declined from 64 % of GDP in 2018 to 6.4 % in 2023 and is projected to remain below 6 % of GDP during 2024-2028. In the baseline scenario, the present value of external debt averages about 5 % of GDP, well below the 30 percent threshold for countries with weak debt-carrying capacity. Debt service indicators also remain low, with debt service-to-exports below 1.2 % and debt service-to-revenue below 4.5 % through 2028. Standardized stress tests, by contrast, push debt service above its indicative ceilings, which supports a moderate rather than a low-risk rating. Yet many peer countries in Sub-Saharan Africa still face precarious debt positions, with numerous low-income nations at high risk or already in debt distress. Sustaining this outlook will depend on continued governance reforms, fiscal discipline, and transparent borrowing that strengthen institutional capacity and resilience to future shocks.

Type of the article: Research Article

Abstract
Public finance management has become increasingly important for achieving Sustainable Development Goals in European Union countries, where fiscal constraints, debt sustainability pressures, and development-oriented investment needs coexist. This study examines the effects of public expenditure structure and fiscal discipline on Sustainable Development Goals performance in EU countries. The analysis uses annual panel data for EU countries over the period 2007–2023. The SDG performance index is constructed from SDG 8, SDG 9, SDG 10, SDG 11, SDG 16, and SDG 17 indicators, while the public expenditure structure index is constructed from indicators reflecting collective government spending, total government expenditure, and the government investment share. Difference GMM and System GMM estimations are applied, and Driscoll–Kraay and KRLS estimators are used for robustness checks. The results show that public expenditure structure has a negative and statistically significant effect on SDG performance, with coefficients of –0.284 in the Difference GMM model and –0.048 in the System GMM model. Fiscal discipline has a positive and statistically significant effect, with coefficients of 0.353 and 0.315, respectively. Robustness estimations also support the negative effect of public expenditure structure and the positive effect of fiscal discipline. However, the Driscoll–Kraay coefficient of fiscal discipline is statistically significant only at the 10% level. These findings suggest that fiscal discipline may support SDG performance through macro-fiscal stability, whereas the scale and composition of public expenditure alone may be insufficient unless they are aligned with SDG-oriented priorities.

Type of the article: Research Article

Abstract
The flypaper effect, explained by the theory of fiscal illusion, occurs when funds transferred from other levels of government increase spending more than funds derived from local tax revenues. This study empirically analyzes the flypaper effect on the sources of funds derived from parliamentary amendments allocated to the health sector. A quantitative and descriptive approach is used, based on a panel of data from 140 municipalities in Mato Grosso, a state located in the central-western region of Brazil, covering the period from 2014 to 2024. Employing a fixed-effects panel data regression model (estimated via OLS), the study controls for unobserved, municipality-specific characteristics that remain constant over time. The analyses confirm the occurrence of the flypaper effect in the municipalities of Mato Grosso, showing that intergovernmental transfers have a greater capacity to induce health spending than own-source revenue. The results show that the fiscal stimulus generated by external resources is significantly stronger than the increase in local government revenue. On the other hand, parliamentary amendments exert a positive impact, although marginal, acting as complementary resources that do not compromise budgetary rigidity and do not serve as the main driver of expenditure expansion during the period. The relevance of this study stems from its contribution to understanding Brazilian fiscal federalism, offering valuable empirical evidence.

Acknowledgment
The author(s) would like to thank the Dean’s Office for Research (PROPesq) at the Federal University of Mato Grosso (UFMT) for the financial support provided for the publication of this article.

Type of the article: Research Article

Abstract
Vertical fiscal imbalance within fiscal decentralization systems and the growing scale of green fiscal spending raise crucial questions about how fiscal structure and environmentally oriented government spending shape green economic growth. This study aims to investigate the impact of vertical fiscal imbalance and green fiscal spending on green economic growth in Indonesia from 2010 to 2022. A descriptive-quantitative approach and econometric methods, including Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS), were applied to panel data from 33 provinces in Indonesia, 2010 to 2022. The descriptive-quantitative results show that regions with high levels of industrialization tend to produce high carbon emissions, and regions receiving special autonomy funds tend to have high vertical fiscal imbalance. The results of the FMOLS and DOLS estimates confirm that vertical fiscal imbalance has a significant negative impact on green economic growth, thereby weakening the effect of green capital on green economic growth, with coefficients of –0.0731 (FMOLS) and –0.0115 (DOLS). Conversely, based on the FMOLS results, green fiscal spending has a positive impact on green economic growth, strengthening the effect of green capital on green economic growth with a coefficient of 0.0331. Strengthening the fiscal capacity of local governments through increased own-source revenues and better collaboration between central and local governments to support sustainable green economic growth is needed.

Acknowledgments
We gratefully acknowledge the support of Universitas Syiah Kuala, which provided funding for this research (PRUUPD) under research contract number 453/UN11.2.1/PG.01.03/SPK/PTNBH/2024, dated May 3rd, 2024.

Type of the article: Research Article

Abstract
The present study investigates the macroeconomic determinants of human development in eight South Asian Association for Regional Cooperation (SAARC) economies during the period 1990–2023, with special emphasis on the roles of public debt, economic growth, financial development, and environmental degradation. A fixed-effects estimation with Driscoll–Kraay robust standard errors and Dumitrescu–Hurlin panel causality tests on an unbalanced panel dataset of 204 observations is used to test the long-run relationships and dynamic interactions among the variables. The results indicate that economic growth and financial development are important and robust determinants of human development. The findings underscore the importance of raising income and deepening finance for the improvement of human capabilities. The effects of public debt on development depend on fiscal governance and the productive use of borrowed resources. Public debt does not have a significant independent effect once well-known econometric problems are accounted for. Environmental degradation is a serious threat to human development and a complex illustration of the link between industrial transformation and sustainability in developing economies. The study highlights the importance of integrated policies in the SAARC economies for promoting inclusive growth, financial inclusion, fiscal prudence, and environmental sustainability.

Type of the article: Research Article

Abstract
The purpose of this study is to examine whether fiscal balance, revenue mobilization, and real economic growth are associated with annual changes in Jordan’s public debt-to-GDP ratio during 2014–2024 and to interpret the implications for public and municipal finance. The study uses annual macro-fiscal data compiled from the IMF Regional Economic Outlook series hosted by FRED, World Bank indicators, the Central Bank of Jordan, and Ministry of Finance reports. It applies descriptive analysis, correlation analysis, and parsimonious ordinary least squares specifications, with all coefficients, p-values, diagnostic tests, and robustness checks interpreted cautiously because the usable regression sample after first differencing is very small. The results show that the public-debt ratio increased from 78.0% of GDP in 2019 to 88.0% in 2020 and remained above 90% during 2021–2024. Revenue excluding grants recovered from 20.1% of GDP in 2020 to 24.1% in 2024, but this recovery did not restore the debt ratio to its pre-pandemic path. In a short annual sample, the baseline regression suggests that fiscal balance is negatively associated with annual debt changes, while real GDP growth has the expected negative sign but weaker statistical significance. These results are indicative rather than causal and should be read together with debt-dynamics theory and Jordan’s fiscal policy context. The findings are consistent with a cautious, growth-friendly consolidation approach, interpreted as an indicative policy implication rather than a direct causal estimate, that strengthens revenue administration, protects productive capital expenditure, manages utility-related guarantees, and improves municipal finance transparency.