Iryna Storonyanska

In the last two years, Ukraine and the world have been living in economic instability caused by the COVID-19 pandemic, which has fundamentally changed the trends in global and domestic economies, public and local finance. This study aims to estimate the trends of economic development of Ukrainian regions in the coronavirus crisis and their impact on the local budgets’ tax revenues generation. Main findings show the impact of the COVID-19 crisis on the development of Ukrainian regions is territorially differentiated. It is determined that in quarantine restrictions, the regions were developing under the impact of behavioral and institutional factors. Although a range of enterprises terminated their activities and there was a decline in income from business activities in 2020, the tax revenues of local budgets increased. The growth of tax revenues was accompanied by decreasing interbudgetary transfers and growing expenditures on containing the spread of pandemics and supporting healthcare. Reduced transfers to local budgets from the public budget affected the funding of investment programs of regional development.
The abovementioned effects of falling business activity and consumer expenditures of the population along with falling investment can be considered the delayed effects of economic activity curtailment in the short-term period. An intensive increase of public investment that stipulates projects co-funding from budget funds and resources of businesses and establishment of cooperation between public, regional, and local levels of government should become among the primary steps to overcome the negative trends.

Stable economic progress and upward dynamics of economic growth in the regions depend on their level of security and ability to withstand adverse macroeconomic and other shocks, as well as the state of affairs in which risks cannot be transformed into threats and dangers. The study aims to assess the causal nexus and the level of sensitivity of regional economic growth components to changes in financial resilience determinants. The research methods include systemic and structural analyses (building an information and analytical model for studying financial resilience), Granger test (identifying causal relationships between the variables under study), risk theory (studying the nature of fluctuations), and spatial and temporal approach. Data from the regions (oblasts) of Ukraine between 2015 and 2021 form the informational and analytical basis of the study. The paper reveals that the targeted use of transfers for socio-economic progress, increasing investment capacity, and bolstering financial and budgetary autonomy through increasing local budget revenues are the dominant financial determinants of regional economic growth. The results show that the most dominant causal nexus exists between (1) budgetary efficiency, interest rates on consumer/mortgage loans, and SME development, (2) the volume of loans/deposits and labor market efficiency and SME development, and (3) innovation development and foreign economic cooperation. Intensification of investment activity is crucial for ensuring real changes in the economic structure of all regions, particularly outsiders, accelerating transformation processes, mitigating regional economic divergence, and increasing competitiveness.

Acknowledgments
The study was conducted within the framework of the “Financial Determinants of Ensuring Economic Growth of Regions and Territorial Communities based on Behavioral Economics” project (№ 2020.02/0215) funded by the National Research Foundation of Ukraine (Competition “Support for Research of Leading and Young Scientists”).

Internal migration caused by the war of russia against Ukraine (with the active phase starting in February 2022) has increased the socio-economic burden on the host communities welcoming internally displaced population from the frontline and occupied territories. On the other hand, it intensifies behavioral reflections of local residents on the integration of internally displaced persons (IDPs). The study aims to identify opportunities, challenges, and prospects for IDPs’ adaptation in host communities (a case study of Lviv oblast, Ukraine). The paper conducted a sociological survey among 2,500 respondents in November 2022–February 2023. The results show that the lack of housing, lack of permanent employment, language contradictions, and forced limited contact with relatives who remain in the combat zone are existential barriers to the integration of IDPs into host communities. The study identified such opportunities for the integration of IDPs into the host society: reducing the risk of depopulation of territories, reducing imbalances in the local labor market in certain sectors of the economy, strengthening social cohesion, developing small businesses, and improving social infrastructure. The respective challenges include increased social tension, competition for jobs and housing, shortage of places in preschool institutions, and disproportionate distribution of budget funds between the local population and IDPs. Conflicts between IDPs and local residents, as well as IDPs and local authorities, require a proactive position of local authorities to initiate psychological support programs and create communication platforms for the exchange of individual experiences and discussion of psychological and emotional issues.