Issue #1 (Volume 11 2022)

Financial reports are required from both the federal and municipal governments to demonstrate and improve governance and raise openness and accountability of government financial management. This study aims to determine how much mandatory disclosure in local government financial reports can be increased by adding variables such as the number of members in the legislative body, debt, and population, as well as a control variable – the age of the municipal authorities. The population of this study comprised all Local Government Financial Statements (LGFS) in Indonesia and the Supreme Audit Agency’s financial statement auditing requirements as of 2018. The paper adopted a purposive sample technique; 248 local governments in Indonesia were sampled. This study tested hypotheses using multiple regression analysis with the SPSS Version 25 application. The findings show that the number of members in the legislative body, debt, and total population do not affect the level of LGFS disclosure; however, the level of welfare does. This study should provide information that can help increase LGFS disclosure in a way that is valuable for local governments. Utilization of information technology in meeting social demands more efficiently and effectively is one of the strategies for local governments in carrying out financial statement disclosures.

An excessive increase in public debt characterizes the contemporary development of the global economic and financial system. The paper aims to examine the short- and long-run impact of state debt on economic growth in Nigeria. The model was estimated using an autoregressive distributed lag (ARDL) bounds testing method to co-integration for the long-run investigation. At the same time, the contemporaneous dynamics were explored using an unrestricted error correction model. The data were collected from the Central Bank of Nigeria’s statistical bulletins and annual reports, and it spanned the years from 1990 to 2020. The study uncovers evidence of a long-term link between the study variables. In addition, the study finds that all the explanatory is statistically significant. Specifically, economic growth is significant and negatively responsive to changes in external debt by 0.19% and debt servicing by 0.07%, contrary to its positive response to changes in domestic debt and exchange rate by 0.27% and 0.18%, respectively. The paper, therefore, recommends that government may consider more domestic borrowings to foreign borrowings that should only be resorted to when it is indispensable. Moreover, the government should also strive to balance loan servicing and the economic sustainability.

Since 2013–2015, financial inclusion has been considered a determinant of economic and social inclusion. Meanwhile, the impact of financial inclusion on economic development directly depends on financial stability. This paper focuses on the development peculiarities of financial inclusion in relation to ensuring financial stability and provides recommendations to Ukraine.
The inclusive development theory and gap theory form the theoretical research base, while generalization, statistical methods, coefficient and graphical analysis, comparison and ranking represent its methodological basis. Financial institution development, financial literacy, income level, cashless economy, and public confidence have been justified as the content-forming factors and impact channels of financial inclusion on financial stability. The development peculiarities of financial inclusion are studied by cross-country analysis considering different financial system models and economic development levels. The weak points of financial inclusion in Ukraine are a sevenfold gap between the banks’ assets and non-bank financial institutions and 37% of the unbanked adult population. Moreover, there is a significant gap between the levels of human capital readiness and information security of banks’ digitalization compared to EU banks – by 2.5 and 1.3 times, respectively, and a critically high level of distrust in banks (70%) with a reasonably high share of payment applications users (58%).
Further developing of financial inclusion and ensuring financial stability in Ukraine requires improving credit cooperation by transforming its structure from multi-institutional to mono-institutional and introducing the developed indicative tools for monitoring potential financial stability threats caused by technological innovations.

Acknowledgment
The study has been conducted within the framework of Applied Research “Ensuring financial stability of the financial sector of Ukraine’s economy on the basis of sustainable development and in the face of the latest epidemiological challenges” with the financial support of the Ministry of Education and Science of Ukraine (state registration number 0121U113271). The authors are also thankful to the editors and anonymous reviewers for their useful suggestions and comments to improve the quality of this paper.

Adjusting the balanced movement of financial flows in the budget process is a vital component of ensuring the functioning of the financial system. This study aims to identify and outline possible areas for improving the management of financial flows in the budget process of Ukraine to regulate structural imbalances of the financial system. With the help of ranking and clustering, the analysis and assessment of local budgets based on indicators that characterize the movement of financial flows was carried out. The used methods made it possible to consider the differences in the formation and direction of budget flows of territorial communities and determine the progress of administrative-territorial units. An assessment of the state of financial flows consolidated in the treasury single account of Ukraine was conducted: the dynamics of balance, the volume of loans and repayments to local budgets, and the Pension Fund of Ukraine were considered. The assessment results made it possible to determine the directions of setting a stable and balanced movement of financial flows and levers to regulate the impact of structural imbalances of the financial system related to the management of cash balances of the treasury single account and increase of its liquidity. The volumes of revenues, expenditures, deficit, and borrowings to the State Budget of Ukraine were estimated to determine the conditions that cause imbalances in the financial system. The directions for timely and complete execution of the decisions by state authorities and local self-governments are outlined.

This study is relevant because it examines the determinants of corruption in local governments that have a negative impact on the success of sustainable development. This study aims to examine the effect of New Public Management (NPM), as measured by fiscal decentralization, financial reporting quality and independent audits, on the level of corruption. The sample consisted of 433 local governments in Indonesia based on data from 2011–2017. PLS-SEM was used as a data analysis technique. The results test shows that fiscal decentralization positively affects corruption with a path coefficient of 0.19 and a p-value of 0.004. The quality of financial reporting has a negative effect on the level of corruption with a coefficient of –0.26 and a p-value < 0.001. Hypotheses testing results also show that audit finding positively affects corruption with a coefficient of 0.10 and a p-value < 0.10. On the other hand, follow-up audit results have no significant effect on corruption with a p-value > 0.10. This study concludes that the NPM mechanism in the form of fiscal decentralization positively affects corruption. These results imply that fiscal decentralization needs to be balanced with good governance, among others, by increasing the quality of financial reports and independent audits.

The threat of rapid spread of COVID-19 infection was felt primarily by residents of big cities and in the economy of resort towns the tourism and recreation sector suffered the most. At the same time, the need for travelling and recreation in conditions of forced isolation and the need for rehabilitation of citizens has not decreased. Accordingly, the municipal authorities should carry out appropriate organizational and financial measures aimed at maintaining the functioning of the domestic market of recreational and tourist services. The study aims to analyze the indicators of financing tourism and recreation within the socio-economic programs of urban development in order to develop recommendations based on the results to improve this funding within the adaptation to the conditions of the pandemic period. This was done by analyzing the development programs of the city of Odesa in Ukraine, the effect of which extends to the pre-pandemic period of 2019, as well as the years of the pandemic 2020–2022. In substantiating the budgeting mechanism within urban development programs built on a systematic approach at the stage of comparative assessment of recreational expectations based on the modified Vroom model one took into account such indicators as: percentage of recreation costs, variability of prices for recreational services, anxiety associated with the consequences of the COVID-19 pandemic, etc. Within the proposed mechanism recommendations are aimed at justifying decisions regarding the variability of funding in urban programs relevant to the development of recreation and tourism, namely, by increasing the funding from the development budget and increasing control over the implementation of these programs, as well as improving the coordination function in order to prepare the ground for the implementation of “4P” and “people-first” models in recreation and tourism at the municipal level.

Acknowledgment
The paper contains the results of research conducted under the National Academy of Science of Ukraine’s grant Formation and Use of Natural-Resource Assets of the Recreational and Tourism Sphere (0120U100159) and the Nominal Scholarship of the Verkhovna Rada of Ukraine for Young Scientists-Doctors of Sciences for 2021 (0121U113482).

This study aimed to investigate the critical aspects of Indonesia’s local government budget structure. The impact of the budget on local fiscal autonomy was also examined by separating the sample of provinces in Java Island and Bali versus Non-Java Island and Bali. The unbalanced panel data was collected on 34 Indonesian provinces from 2013 to 2020. The results showed that locally-generated revenue and general allocation funds positively affect the regional fiscal autonomy index. These results indicate that local revenue and general allocation funds have improved regional fiscal autonomy. When the provincial sample is separated, general allocation funds positively and significantly affect the regional fiscal autonomy index in the provinces of Java Island and Bali. Furthermore, locally-generated revenue, as well as general allocation and profit-sharing funds, play a significant role in increasing the regional fiscal autonomy index in provinces outside Java and Bali, such as Sumatra, Kalimantan, Sulawesi, and Papua. These findings suggest that different geographical conditions and infrastructure have varying effects on encouraging regional fiscal autonomy. This study invites policymakers to address the strengthening of regional authority to explore income sources and budgeting quality and evaluate intergovernmental fiscal relationships.

Acknowledgment
The authors express gratitude to the three anonymous reviewers and seminar attendees at Mulawarman University for their insightful comments.

This study deals with the governance and performance of utility companies following mergers in local government organizations (LGOs). It is demonstrated by using the municipal water supply and sewerage company in city of Serres as a case study of how the reform initiative known as “Kallikratis” has impacted Greek municipal water and sewerage companies. As a result of the Kallikratis Program, the municipalities were merged, and new data were added to the map of local government in Greece. The methodological approach entails surveying the economic analysis of raw data using a number of financial ratios (financial statements of the municipal company). The study’s findings demonstrate that the municipal company of Serres was able to plan the actions that resulted in an improvement of the majority of the examined ratios after merger events, despite the extra responsibilities and geographic areas that the Kallikratis Program added to the municipal companies and the reduction of the extraordinary subsidies as a result of the Greek debt crisis. Eleven of the fourteen ratios perform better than they did before the merger, while three of them actually perform worse (2011–2018). However, various and contradictory results about the evolution of these ratios are seen over the crisis era, as some of them initially show a partial improvement (in the midst of the economic crisis period), but then they gradually deteriorate by the end of the crisis.

The economic development of villages has a substantial impact on community welfare. It can become the backbone of the national economy. However, significant obstacles in village development are lack of human resources (HR), high poverty rates, poor common welfare, justice, and prosperity values. In 2022, in Indonesia there are 9584 underdeveloped villages. Some of the causes of the weak economic condition of a village are economic potential was not optimized, and excessive government interference stifled creativity and independence. This study seeks to explore the extent of the positive impact of the sharia economic implementation model in developing the village’s economy and the model’s potential as an alternative solution to building the economy of poor villages. This paper used descriptive qualitative methods, observations, and interviews with community leaders, community representatives, and the regency office. The results show that the economic development strategies carried out by Gerdu Village had three stages, namely (1) education and cooperation, (2) implementation and management, and (3) evaluation and planning. In addition, the internal driving factor behind the success of the village’s development lies in the activeness of village leaders in implementing sharia economics. As for cooperation with external parties, National Zakat Institution, related local department government, and other institutions around the village have also actively assisted in its development. Positive impacts on the community include increased employment opportunities, income, tourist visits, and tourism and language village programs. This study is expected to be one of the references to explain the Islamic economy’s role in advancing the poor village’s economy.

Acknowledgment
We would like to express our utmost gratitude to the Department of Sharia Economic Law Study Program, Universitas Muhammadiyah Surakarta and the Department of Islamic Economics, Universitas Airlangga for supporting this study and its publication process.

The stable functioning of the public finance system requires a rational regulatory apparatus. The central bank occupies a special place in this system. Science and practice prove that the central bank’s political and economic independence determines its effectiveness. Thus, it is crucial to determine the prerequisites for ensuring its independence. The study aims to assess the influence of governance quality on the central bank’s independence, considering the variance of the socio-political development of countries. The analysis was conducted based on 53 countries. Panel regression modeling with random effects was chosen as a research method. The analysis approach involves calculations for the groups of countries that differ in social and political development parameters according to the following criteria: the initial level of the central bank independence; level of human development; political rights freedom; level of civil liberties; and political regime.
Socio-political factors significantly affect the central bank’s independence in the following conditions: a high initial level of independence of the central bank, a high level of human development, and an average level of political and civil freedom. At the same time, the governance quality ensures the growth of the central bank’s independence regardless of the countries’ political regime. Three factors have the most significant influence on ensuring the independence of the central bank, namely “government efficiency,” “quality of regulation,” and “rule of law.”

A significant size of the shadow economy is a threat to the sustainable functioning of a country’s economy, its ability to finance economic and social programs. The paper studies the influence of the shadow economy on the macro-financial stability of the EU countries. The dependence between macro-financial stability and the size of the shadow economy was estimated using the quadrocentric (considering the four channels of the shadow economy) recursive (takes into account direct and inverse relationships between them) model. Dependence between indicators was analyzed using Euler’s methods, Calvo’s and Dixit Stiglitz’s principles, Taylor’s and Smets-Wouters’ function. It has been proved that shadow economy channels affect the macro-financial stability almost equally (an increase in the size of the shadow economy in Slovenia by 1% leads to a decrease in macro-financial stability by 0.562% for tax, 0.56% for investment, 0.572 for institutional, and 0.444 for social channels). At the same time, the growth in the volume of shadow transactions through one channel forms an impetus for the increasing intensity of use of the remaining channels to hide income. With the help of the payment matrix, the optimal level of drivers of shadow economy by which the targeted value of the level of macro-financial stability is achieved was determined. It was concluded that ensuring good governance in the direction of preventing shadow schemes of capital withdrawal should be carried out in terms of institutional, tax, social, and investment channels of the shadow economy.

Acknowledgment
This work was supported by the Slovak Research and Development Agency under the contract No. APVV-16-0602.

Public debt can attract funds to finance public needs and stabilize the country’s economic development. This study aims to analyze the relationship between public debt and economic development considering the war actions in Ukraine. This paper uses bibliometric analysis, comprising in-built Scopus and WoS instruments, VosViewer, and Google Trends tools. The overall results show the close relationship between public debt, economic development, and war (armed conflict) concepts. The publications were examined according to key features: containing the keywords from the green and red clusters; covering the period 2015–2018 and 2022; and discussing public debt in Central and South-Eastern Europe. This improved the theoretical and methodological approach to the bibliometric analysis of public debt. Moreover, the study identified risks (based on selected scientific publications) to which the primary attention should be paid during the war and post-war periods in Ukraine: currency and demographic risks. Key recommendations were provided to ensure debt security during the war and post-war periods. However, the given recommendations should be implemented within the framework of the Recovery Plan of Ukraine, which would improve the credit rating and reliability of the state.