Issue #2 (Volume 14 2025)

Since the reform era, Indonesia has experienced three stages of fiscal decentralization. In the third stage, the focus of the policy shifted to village development by giving authority to manage village funds. However, due to a lack of supervision and inefficient governance, this policy has not been able to improve the quality of rural development. The purpose of this study is to evaluate the level of efficiency of village fund use and analyze the variables that influence it. This study employs data envelopment analysis (DEA) to determine the level of efficiency and binary logistic regression to determine the variables that influence it in 2018 and 2021. The results show an increase in the number of provinces experiencing efficiency in managing village funds. In 2018, 10 provinces (30.30%) were declared efficient, but the remaining 23 (69.70%) were declared inefficient. In 2021, the number of provinces declared efficient increased to 14 (42.42%), while 19 (57.58%) were still considered inefficient. This finding signals that the level of village fund efficiency in Indonesia is still a major challenge toward increasing rural economic growth. The variable that significantly affects the level of efficiency is the level of education of the village head. The lack of human resources who have expertise in village fund management has resulted in low-quality implementation of village development and community empowerment programs.

Digital transformation in village financial management has become a strategic issue in modern governance, but research on digital transformation is still limited and not well systematic. This study aims to analyze the evolution and development of digital transformation research in village financial management through systematic bibliometric analysis from 2015 to 2024. The paper uses bibliometric analysis of 507 documents from journals in the Scopus database processed using RStudio software with the biblioshiny package. The research findings reveal gaps in theoretical development, especially in the integration of local governance frameworks with digital innovation models. The research landscape shows a growing focus on accountability mechanisms (28 articles) and transparency systems (24 articles) but lacks comprehensive studies on implementation challenges and success factors. Although local governance has emerged as a dominant research stream (89 articles), there is still less attention to critical areas such as digital literacy, cybersecurity, and change management in the rural context. The analysis identifies three future research directions: the need for a specific digital transformation framework for village-level financial systems, mechanisms for integrating traditional governance with digital innovation, and evaluation metrics for the success of digital transformation in rural settings. These findings contribute to the development of theoretical understanding and practical implementation of digital transformation in village financial management.

This study aims to examine the impact of corporate social responsibility, budget surplus, and investment cash flow on capital expenditure budgeting within city government clusters in Indonesia. The population includes city governments recorded in the Ministry of Home Affairs. The samples were taken from data on corporate social responsibility and budget surplus, as well as investment cash flow for the fiscal year 2023 and capital expenditure budget for 2024 in 81 city governments in Indonesia. Empirical findings indicate that corporate social responsibility negatively affects capital expenditure budgeting across all city government clusters. The impact of budget surplus varies. On the one side, budget surplus has a positive effect on capital expenditure budgeting in Cluster A (highest) and a negative impact on capital expenditure budgeting in Cluster C (lowest). Conversely, in Cluster B (middle), budget surplus does not affect capital expenditure budgeting. Similarly, investment cash flow positively affects capital expenditure budgeting in Cluster A and negatively affects capital expenditure budgeting in Cluster C. Meanwhile, in Cluster B, investment cash flow does not affect capital expenditure budgeting.

Sukuk has received growing recognition as a Sharia-compliant financial instrument that promotes inclusive economic development and poverty alleviation. This study aims to investigate the dual impact of Sukuk financing on economic growth and poverty reduction in Indonesia, Malaysia, and Brunei Darussalam – three ASEAN countries with active Sukuk markets and shared development priorities.
A quantitative research design is adopted using pooled (panel) data covering the period from 2019 to 2023. Data were collected from the Asian Development Bank, Brunei Darussalam Islamic Finance, and the Financial Services Authority. Empirical investigation employs simultaneous panel equations to explore the interdependence between variables. The study applies the instrumental least squares method and the two-stage least squares technique to address potential endogeneity. Economic growth is measured by gross domestic product growth rate, while the poverty headcount ratio quantifies poverty levels. Sukuk financing is represented by the total volume of Sukuk issued. Control variables include the Human Development Index, which reflects social progress, and the inflation rate, which captures macroeconomic stability.
The findings indicate that a one percent increase in Sukuk financing results in a 0.09 percent rise in gross domestic product growth (p < 0.05), enhancing job creation and infrastructure development. Furthermore, a one percent increase in economic growth leads to a 5.97 percent decrease in poverty levels (p < 0.01), while inflation leads to a 0.64 percent rise in poverty (p < 0.05). These results confirm the effectiveness of Sukuk as a sustainable financing tool for long-term growth and poverty reduction in selected ASEAN countries.

Acknowledgment
The authors are thankful to the Deanship of Graduate Studies and Scientific Research at University of Bisha for supporting this work through the Fast-Track Research Support Program.

The Original Article was published on May 23, 2022

Correction
the section INTRODUCTION of this article in paragraph 2, the text was corrected to include the link to the citation source. The sentence now reads: “Increasing the effectiveness of financial flow impact on the budget process contributes to creating conditions for sustainable economic growth and improving the standard and quality of life around the world, including Ukraine (Muringani, 2022).”
In the LITERATURE REVIEW section of this article, the following adjustments were made:
In paragraph 1, the text was corrected to include the links to the citation sources. The sentences now read: “Financial flow management aims to ensure the growth of budget revenues and expenditures, improve the efficiency of budget expenditures, and quality and availability of budget services as a result of transformational changes due to the modernization of the budget process (Bisogno & Cuadrado-Ballesteros, 2021; Renzio & Masud, 2011). These changes include decentralization of the financial system and transition to a medium-term three-year perspective of budget planning that necessitated changes in budget legislation (Muharremi et al., 2020).”
In paragraph 4, the text was corrected to include the link to the citation source. The sentence now reads: “The formation and direction of financial flows are characterized as components of the budget process, which makes it possible to solve problems related to the emergence and reduction of existing structural imbalances of the financial system: the state of revenues and expenditures of budgets; the growing public debt of Ukraine, the presence of a persistent budget deficit (Herold, 2020).”
In the RESULTS AND DISCUSSION section of this article in paragraph 2, the text was corrected to include the link to the citation source. The sentence now reads: “Regulation of structural imbalances in the financial system is possible by improving the management of financial flows in the budget process of Ukraine, which involves the use of an effective mechanism for managing the liquidity of funds balances concentrated in TSA (Moretti et al., 2021).”
In paragraph 38, the text was corrected to include the link to the citation source. The sentence now reads: “Areas of further research on the proper management of financial flows may be related to improving fiscal regulation (Tollini, 2021).”

The direction of the state budget to defense and the military-industrial complex under martial law imposes more stringent requirements on the system of formation and execution of state budget expenditures. The study aims to determine the efficiency of the distribution of state budget expenditures and their impact on the country’s macroeconomic stability under martial law. To evaluate the implications of martial law on the expenditure component of Ukraine’s state budget, a correlation regression analysis was employed to investigate the relationship between the budget deficit and the levels of total state budget expenditures and defense spending. The empirical findings indicate that fluctuations in state budget expenditures are a significant determinant of the budget deficit. In particular, a 1 billion UAH increase in total expenditures is associated with an average rise in the budget deficit of 1.19%. This result underscores the importance of a sound fiscal policy that ensures the efficient and rational allocation of budgetary resources, particularly under conditions of heightened military and security needs. Based on analytical results, medium-term budgetary projections for the period of 2025–2027 were developed. The forecast estimates that state budget expenditures will constitute approximately 45.74% of GDP, while the budget deficit is projected to reach 18.84% of GDP. The findings emphasize the need for effective expenditure management and strategic prioritization of fiscal resources under martial law. The paper offers directions for strengthening the macroeconomic stability and financial resilience of Ukraine under martial law through the rational distribution of budget expenditures.

The development and implementation of state policy to overcome energy poverty has become particularly important in Ukraine and requires adequate methods and tools to support consumers in transitioning to a low-carbon economy. The study aims to conduct a comparative analysis of energy poverty in the EU and Ukraine, evaluate the cost of government support for vulnerable households through subsidy mechanisms, and improve the methodology for calculating heating subsidies in Ukraine under low-carbon transition conditions. Based on statistical data, the study reveals the intensifying negative impact of the 2021–2022 energy crisis on households in both the European Union and Ukraine. The results of evaluating the cost and structure of energy subsidy portfolios indicate that most governments worldwide are shifting toward economic decarburization and phasing out coal consumption subsidies in response to stricter climate obligations. The findings reveal that while energy subsidies in Ukraine are socially oriented, they place a significant burden on the state budget and fail to address the root causes of energy poverty. The paper explores the mechanism of fuel subsidies and argues that the implementation of energy efficiency measures must accompany the gradual elimination of such support. It also presents a calculation of heating subsidies based on the energy efficiency class of residential buildings, consistent with the goal of introducing NZEB standards. The formulated proposals seek to strengthen support for energy-vulnerable households and enhance monitoring activities to obtain more comprehensive and objective data on the extent of energy poverty in Ukraine.

The Original Article was published on January 16, 2024

Correction
In the LITERATURE REVIEW section of this article, the following adjustments were made:
In paragraph 7, the following sentences were added: “Empirical evidence also suggests that fluctuations in the money supply and exchange rates can significantly affect a country's ability to service its external public debt, especially in developing economies (Aid & Benelbar, 2023)” and “Moreover, studies underline the necessity of introducing adaptive management practices within public financial institutions to ensure responsive and efficient handling of external public debt (Grynko & Gviniashvili, 2015).”

In paragraph 8, the following sentence was added: “An important factor affecting external debt dynamics in Ukraine is the functioning of systemically important domestic banks, which influence both the demand for sovereign borrowing and its sustainability (Buriak et al., 2015).

In the REFERENCES section, the below listed sources were deleted:

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Gentsoudi, V. (2023). The impact of effective leadership on public sector’s financial instruments: Empirical evidence from Greece. Business Ethics and Leadership, 7(2), 47-54. https://doi.org/10.21272/bel.7(2).47-54.2023

Gontareva, I., Litvinov, O., Hrebennyk, N., Nebaba, N., Litvinova, V., & Chimshir, A. (2022). Improvement of the innovative ecosystem at universities. Eastern-European Journal of Enterprise Technologies, 1(13(115)), 59-68. https://doi.org/10.15587/1729-4061.2022.251799

Kaya, H. D. (2023). The impact of the 2008–2009 global crisis on loan applications and access to finance. Financial Markets, Institutions and Risks, 7(2), 12-17. https://doi.org/10.21272/fmir.7(2).12-17.2023

Khouiled, B., Chini, S.-E., & Benrouina, M. (2023). Dynamic relationship between exchange rate and trade balance. SocioEconomic Challenges, 7(3), 164-173. https://doi.org/10.61093/sec.7(3).164-173.2023

Korneyev, M., Berezhniuk, I., Dzhyndzhoian, V., Kubakh, T., & Horb, K. (2022). Business marketing activities in Ukraine during wartime. Innovative Marketing, 18(3), 48-58. https://doi.org/10.21511/im.18(3).2022.05

Kozmenko, S., & Korneev, M. (2014). Periodization of financialization process of economics: Domestic and foreign contexts. Economic Annals-XXI, 9-10(1), 73-76. Retrieved from http://ea21journal.world/index.php/ea-v144-18/

Leonov, S. V., Vasylieva, T. A., & Tsyganyuk, D. L. (2012). Formalizatsiia funktsionalnykh obmezhen diialnosti instytutiv spilnoho investuvannia naosnovi porivnialnoho analizu finansovykh rynkiv krain hrupy FM CEEC [Formalization of functional limitations in functioning of co-investment funds basing on comparative analysis of financial markets within FM CEEC]. Actual Problems of Economics, 134(8), 75-85. (In Ukrainian). Retrieved from http://essuir.sumdu.edu.ua/handle/123456789/57569

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Maile, K. V., & Vyas-Doorgapersad, S. (2023). Misconduct impeding good governance in the South African public service. Business Ethics and Leadership, 7(2), 9-17. https://doi.org/10.21272/bel.7(2).9-17.2023

Makedon, V., & Korneyev, M. (2014). Improving methodology of estimating value of financial sector entities dealing in mergers and acquisitions. Investment Management and Financial Innovations, 11(1), 44-55. Retrieved from https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/5607/imfi_en_2014_01_Makedon.pdf

Naumenkova, S., Mishchenko, V., Chugunov, I., & Mishchenko, S. (2023). Debt-for-nature or climate swaps in public finance management. Problems and Perspectives in Management, 21(3), 698-713. https://doi.org/10.21511/ppm.21(3).2023.54

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Zhuravka, F., Filatova, Н., & Aiyedogbon, J. O. (2019). Government debt forecasting based on the Arima model. Public and Municipal Finance, 8(1), 120-127. https://doi.org/10.21511/pmf.08(1).2019.11

Restaurant tax is a crucial source of funding for local government’s development activities. However, there is still very limited research that analyzes restaurant tax compliance in the context of today’s rapidly growing e-commerce. This paper is relevant because the growth of e-commerce-based restaurants in local governments in Indonesia contrasts with the decrease in tax revenues. This study aims to analyze the determinants of restaurant tax compliance using e-commerce and self-assessment systems as independent variables and technology-based tax monitoring as a moderating variable. The sample consists of 68 payers of restaurant tax in the city of Semarang, Indonesia, who have used e-commerce to transact their business. The testing of the hypotheses was carried out using partial least squares-structural equation modeling (PLS-SEM). The results show that the self-assessment system has a positive significant effect on tax compliance with a path coefficient of 0.31. Technology-based tax monitoring significantly affects tax compliance with a path coefficient of 0.52. Technology-based tax monitoring acts more as the main determinant rather than as a moderating variable. The study stresses the importance of implementing technology-based restaurant tax monitoring for local governments. Local finances, primarily funded by local taxes such as the restaurant tax, are essential for bolstering regional budgets. These funds directly contribute to public services and infrastructure, making restaurant tax compliance vital for local government autonomy and development.

Fiscal decentralization is a key component of effective economic governance, enhancing the role of local governments and promoting more efficient allocation of public resources. A central dimension of fiscal decentralization involves the distribution of tax revenues across different levels of government. The purpose of this study is to assess the level of fiscal autonomy of local governments in the Republic of Armenia using the OECD methodology and tax autonomy as a measure of local government taxing powers. By comparing Armenia with OECD unitary states through cluster analysis, the analysis identifies an optimal structure for local tax revenue systems. Armenia exhibits a low level of tax autonomy comparable to the weakest cluster of OECD unitary countries, which includes Estonia, Ireland, Israel, Lithuania, New Zealand, and the UK. The findings suggest that increasing local government revenues by deducting from existing indirect taxes, such as excise duty and VAT, is challenging due to administrative inefficiencies and difficulties in accurately estimating the tax base. Due to their narrow and centralized nature, excise taxes are poorly suited to local use, while the complexity of VAT and its allocation of revenue to customs authorities limits its effectiveness at the local level. In light of its findings, the study recommends shifting the focus toward direct taxes to improve local revenue more effectively and sustainably.

This study aims to comprehensively assess the state’s financial security of Ukraine in the context of mounting debt and economic instability. Particular attention is paid to the security of the financial sector, which determines the overall level of financial system security. This involves constructing a regression model of the relationship between the level of financial security and debt, the size of the economy, and reserves, as well as forecasting likely medium-term dynamics.
Modeling revealed imbalances. During the war, the level of financial security dropped to a critical level, providing only about 30% of the required level of economic protection. One of the most vulnerable components was debt security, which shows a high degree of dependence on external financing. Regression modeling demonstrated a clear negative correlation between the amount of external debt and the level of financial security, with each increase in the debt burden being accompanied by a decrease in the integral index. Conversely, despite being observed, the positive impact of GDP growth proves insufficient to counterbalance the identified threats. Consequently, if current trends persist, Ukraine’s financial security level may decline to 16.6% by 2030, indicating an imminent approach to a critical point of macro-financial vulnerability.
The study highlights the pressing need to reconsider public financial policy, particularly concerning debt management, budget planning, and the modernization of the financial system. This is essential not only to sustain the economy but also to safeguard the state in the face of an existential threat.

Acknowledgment
This study was financially supported by the NATO SPS Program “Security of territorial communities: evidence from the Eastern European countries”.
Also, this article is published as an output of the project “Economic bases for managing Ukraine’s debt security during martial law” (No. 0121U112685).