Mariana Melnyk

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.

The development and efficient functioning of entrepreneurship is the basis of a market economy, as well as the key to the country’s innovative socio-economic development and growing competitiveness on an international scale. The formation of a transparent and qualitative business climate is an incentive for the efficient entrepreneurship development. The paper is aimed at identifying structural-institutional transformations in the business environment and their impact on the development of small businesses. The analysis of socio-economic parameters of the business environment is based on the elasticity method and the system approach, which have been tested on the example of cities in the Western region of Ukraine. Outlining the features of setting up the business environment and its functioning has provided the grounds for detecting major problems hampering efficient business development. The comparative analysis has confirmed a close relationship between socio-economic transportation processes and conditions created for businesses. The evaluation of institutional environment has confirmed that cities striving to improve transparency in climate regulation and urban environment management achieve the growing investment activity and positive dynamics of small businesses development. The calculated elasticity coefficients prove that the growing investment activity positively impacts the number of small businesses and the volume of products sold by them. However, the expected growth in employment was not achieved due to the high level of shadow activity on the labor market and migration activity of the population.

The insurance sector plays a critical role in the economy, providing protection and security of the state and influencing its social and economic development. However, having a significant potential for development, the sector cannot fully realize it due to many problems, including its shadowing. Using the method of unprofitable enterprises analysis, which is applied by the Ministry for Development of Economy, Trade and Agriculture of Ukraine to determine the level of the shadow economy, considering the type of economic activity, the level of shadowing of the insurance services sector in Ukraine and its regions in 2013 and 2018 was calculated. The calculation results showed an increase in the shadow level of the insurance services sector both in Ukraine as a whole and in the separate regions. To evaluate the effectiveness of the insurance sector potential, given the calculated level of shadowing, a comprehensive assessment was carried out by standardizing the values of selected indicators characterizing the potential of the insurance sector in the context of Ukraine’s socio-economic development. The indicators of the efficient use of the insurance services sector potential in Ukrainian regions, calculated using an integrated assessment, showed an increase in the efficiency of using the potential of the insurance sector in three out of five analyzed regions. Zaporizhzhia region demonstrated the most significant growth. It has been proven that an increase in the volume of services provided is a key factor in increasing the social and economic efficiency of the insurance sector.