Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
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Vol. 39, Nº 68 (Enero - Junio) 2021, 531-548
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Fiscal mechanism in public
administration of social risks
DOI: https://doi.org/10.46398/cuestpol.3968.34
Volodymyr G. Bulba *
Maryna V. Goncharenko **
Oleksandr V. Yevtuxov ***
Abstract
Through a critical document-based methodology, the research
analyses the essence of social risks as the object of public
administration, proposes their classication, tests the need for
interconnection of social and scal policies, bases the structure of
the nancial and budgetary mechanism for public management
of social risks and, consequently, proposes to improve it by
increasing investment in human capital to prevent social risks.
It is concluded that the orientation of the social protection system to
countervailing measures in relation to certain groups of the population
seeks to solve the problem of poverty by strengthening tax distributional
processes, increasing the amount of social spending on total state spending,
but if it fails to increase the effectiveness of social programmers, the main
social problems will not be solved. It is established that the main direction of
improvement of the public social risk management tax mechanism should
be the minimization of the compensatory nature of the nancial provision
of the consequences of social risks and, the activation of the application of
investment tools for the prevention of their occurrence.
Keywords: scal policy; social policy; scal mechanism; investment in
human development; social justice.
* Full Doctor in Public Administration, Professor at the Department of Social and Humanitarian Policy,
Kharkiv Regional Institute of Public Administration, National Academy of Public Administration
under the President of Ukraine, Ukraine. ORCID ID: https://orcid.org/0000-0002-9033-8851. Email:
vg.bulba5514-3-2@tanu.pro
** PhD in Public Administration, Associate Professor at the Department of Economic Theory and Finance,
Kharkiv Regional Institute of Public Administration, National Academy of Public Administration
under the President of Ukraine, Ukraine. ORCID ID: https://orcid.org/0000-0001-7432-0048. Email:
goncharenko.m@uohk.com.cn
*** Postgraduate Student at the Department of Social and Humanitarian Policy, Kharkiv Regional Institute
of Public Administration, National Academy of Public Administration under the President of Ukraine,
Ukraine. ORCID ID: https://orcid.org/0000-0001-6286-4072. Email: oyevtuxov@nuos.pro
532
Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
Mecanismo scal en la administración pública de
riesgos sociales
Resumen
Mediante una metodología critica de base documental, la investigación
analiza la esencia de los riesgos sociales como objeto de la administración
pública, propone su clasicación, prueba la necesidad de interconexión de
las políticas sociales y scales, fundamenta la estructura del mecanismo
nanciero y presupuestario de la gestión pública de los riesgos sociales y,
en consecuencia, propone mejorarlo aumentando la inversión en capital
humano para prevenir riesgos sociales. Se concluye que la orientación
del sistema de protección social a medidas compensatorias en relación
con ciertos grupos de la población busca solucionar el problema de la
pobreza mediante el fortalecimiento de los procesos distributivos scales,
aumentando el monto del gasto social en el gasto total del estado, pero si no
logra aumentar la efectividad de los programas sociales no se resolverán los
principales problemas sociales. Está comprobado que la principal dirección
de mejora del mecanismo scal de gestión pública de riesgos sociales debe
ser la minimización del carácter compensatorio de la provisión nanciera
de las consecuencias de los riesgos sociales y, la activación de la aplicación
de herramientas de inversión para la prevención de su ocurrencia.
Palabras clave: política scal; política social; mecanismo scal;
inversión en desarrollo humano; justicia social.
Introduction
Changes that are rapidly spreading in the modern society, in addition
to undeniable positive results, generate socio-economic and socio-political
instability, cause difculties in managing society in unpredictable, extreme
situations that potentially can lead to certain social risks in the eld of
human development. The problem of public management of social risks is
complicated by the fact that the mechanisms of its implementation, which
were developed in previous years, no longer correspond to the global social
changes in society at large. Social risks are caused by the ambiguity of social
processes and extremely diverse in their manifestations.
Afliation of risks to a certain social sphere primarily affects the
nature of their consequences, which entails the necessity of developing
appropriate administrative mechanisms, the presence of which can testify
to the existence of a real state social policy. However, the current problems
of methodological and methodical nature remain unresolved regarding the
state regulation of human development and its mechanisms, especially
budget ones, with the purpose of harmonizing the activities of all branches
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of government and ensuring the nation-wide priorities of social policy at all
levels of government.
The purpose of this study is to substantiate the essence and structure of
the scal mechanism of public management of human development social
risks on the basis of clarication of the subject and object of management,
the denition of general principles, methods, tools, logical schemes of the
functioning of this mechanism with the allocation of managerial techniques
they are based on (Golub et al., 2020a).
The theoretical and methodological basis of the research became
the works of Ukrainian and foreign scientists in the eld of public
administration, management, economics, nance, sociology, risk studies
and so on. In foreign scientic literature, research on social risks is carried
out in the context of theoretical foundations of risk. They are implemented
in the writings of Arrow and Chichilnisky (1999), Beck (2010), Giddens
(1991), Douglas (1993), Lucas and Sargent (1981), Luhmann (1991), Knight
(2003), and others.
Some aspects of the essential components of the mechanism of public
management of social risks of human development are the subject of
research by many Ukrainian scholars, among them: Boretskaya (2001),
Hnybidenko et al. (2006), Libanova (2010), Nadraga (2015), Sadova
(2009), Semiv (2013), Romanyuk (2009) and others. The assessment of the
impact of social risks is mainly carried out in the context of social security
and social protection, with insufcient attention paid to the study of the
mechanisms of public management of social risks in the eld of human
development as a complex phenomenon.
Problems of nancing the social sphere were dealt with by Beskid (1998),
Bukovinsky (2001), Bolshakov (1999), Vasylyk (2000), Kravchenko (1999),
Romanenko (2004), Chugunov (2003) and others. However, there was
no combination of human development and budget issues in their works.
Therefore, it is necessary to develop the methodological foundations of a
unied system of coordinates of social and scal policies, which requires
a scientic rethinking of the concept and function of the budget from the
standpoint of determining its role as a regulator of human development.
Methodical basis of work consists of a number of modern methods
of scientic research, among which: dialectical method – to determine
the essential characteristics of social risks; generalization method,
comprehensive and systematic approaches – to substantiate the scientic
principles of public management of social risks; methods of observation,
comparison, analysis and synthesis – for analysis of subject-object relations
in the system of public management of social risks and characteristics of scal
tools for the implementation of state social policy; an integrated approach,
methods of induction and deduction, abstraction, and formalization –
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
to substantiate directions for improving the scal mechanism of public
management of social risks in Ukraine. The information base of the research
was the results of research conducted by leading Ukrainian and foreign
scientists, information resources of the Ministry of Finance of Ukraine,
the Ministry of Social Policy of Ukraine, scientic and statistical Internet
resources.
1. The Essence of Social Risks and Their Types
Under social risks, as a rule, we understand the dangers and threats
that restrict economic independence, social well-being and cause negative
changes (deterioration) of the social situation of a person. The social
situation, in turn, is determined by a combination of socio-labor, economic,
legal, and other parameters inherent to a social group or an individual. The
basic parameters of social status include quality and standards of living;
relation to property; access to power; social infrastructure (services in the
eld of education, health care, culture, social protection); place in the social
and labor sphere, etc. (Golub et al., 2020b).
Social risks by their nature can have an economic, social, political,
natural, man-made, etc. nature. As a rule, risks are closely interrelated, and
in most cases, it is difcult to draw a clear line between them. In a broad
sense, all these risks are social, because they have, in general, social mass
character. Undoubtedly, there are risks of worsening of the social situation
of the individual, when risks acquire a personal character, when the cause of
human danger is himself: his behavior, way of life, attitude toward society.
Research on social risks in Ukraine is mainly based on the principles of a
realistic direction, gradually acquiring an industrial dimension.
Thus, Sadova (2009), Romanyuk (2009) consider social risk problems
from the standpoint of national security, studying them as certain threats to
human and social development, which turn into dangerous events. Semiv
(2013) focuses mainly on migration risks, which can potentially lead to a
loss of human resources in quantitative and qualitative terms, due to the
underestimation of labor costs in the national economy, the simplication
of the visa regime with other countries, and so on.
The result of the research of social risks in the labor sphere, carried
out by Nadraga (2015), was the allocation of them into a separate system,
because according to the author it is this type of risk that is inherent to
human economic activity (including periods before and after productive
employment). The author determines that social risks in the labor sphere
can have both a positive and a negative effect of the consequences of
implementation. Along with this, for the labor sphere, the study of the
negative consequences of their implementation is extremely important.
From a legal point of view, social risks are considered primarily as insurance.
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In particular, the Fundamentals of the Ukrainian legislation on compulsory
state social insurance dene the insurance risk as the circumstances in
which citizens and/or members of their families may lose their livelihoods
temporarily or permanently and need nancial support or social services on
compulsory state social insurance.
In a special study, conducted by scientists at M.V. Ptukha Demography
and Social Studies Institute of NAS of Ukraine (Libanova, 2010), social
risks are considered from the standpoint of human development. Accepting
its basic conceptual position regarding the impossibility of the existence
of social risks in an ideal form, we should note that each of them is closely
related to phenomena and processes in other spheres of society. According
to the results of this study, the most well-dened denition of social risks
was given – a threat that arises and manifests itself within the social sphere
of society, has negative social consequences, inuences the livelihoods
of individuals, social groups, and society as a whole. The wording of the
denition of social risk, according to the authors, should be based on several
prerequisites:
- rely on a general denition of risk since social risk is one of the
individual cases of general perceptions of the risk category.
- highlight the features of the content of social risk, distinguishing it
from other types of hazards (natural, man-made, etc.).
- include rational components of risk denition, appearing in literary
sources, legislative acts, etc.
Considering the stated requirements, the following denition is
proposed: the social risk of human development is a separate type of risk,
representing a measurable share of the potential danger of deviations from
social norms in the system of social relations, processes, and activities. It
should be noted that the very concept of social risk is only at the initial
stage of development and implementation in the legislative eld. Unlike
Ukrainian, Western jurisprudence has been working on social risk issues for
quite some time. As a rule, the general concept of “risk” in the legal science
of the West is interpreted in the broad sense, that is, as any undesirable
phenomena for society. For the most part, these are those that directly
threaten the life or health of a person.
Social risk, like any other social phenomenon or process, has a complex
system of interconnections with other processes, and therefore, the
manifestation of causal relationships is multifactorial and multidimensional,
which necessitates a specic classication of social risk. Its purpose is to
clearly determine the place of each type of social risk in accordance with the
dened criteria. In this context, we can draw two approaches: for the rst,
all social risks are classied into four groups:
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
- economic nature (unemployment, low income, migration).
- physiological nature (temporary or persistent disability, pregnancy
and childbirth, old age, death).
- professional nature (occupational injury, occupational disease).
- demographic and social character (multi-member families, single
parenting, orphancy).
The second approach is based on possible ways to compensate for social
risks:
- insurance, which provides for a special mechanism for economically
justied amounts of insurance premiums and related insurance
payments.
- non-insurances, which underlie the organization of the system of
state social assistance to certain categories of citizens. The amount of
benets depends on the degree of need of a citizen.
In the aggregate, social risks are the basis for the construction and
functioning of the state system of social protection, nancial and material
mechanisms, which are designed to ensure the implementation of the right
to social security for any person who needs it (Kostruba, 2018a; Kostruba,
2018b).
Social policy is a set of measures of state and non-state nature, aimed
at identifying, meeting, and reconciling the needs and interests of citizens,
social groups, and territorial communities. The main component of social
policy is ensuring equal access of the population to social services of the
proper quality. The content of the concept of “social services” is not limited
to social protection and social security of the population, but extends to
the protection of health, spiritual and physical development and education,
housing.
This also includes the solution of the state problems related to
employment, communal infrastructure, ecological status of human habitats.
In determining of priority directions of social policy by the state, the main
attention is paid to cases where, under certain conditions, the welfare of a
society or its separate groups is reduced. Moreover, the concept of “well-
being” can include decent housing, work conditions, and also the ability to
work, the level of the disease. Naturally, all these concepts are aspects of
human development.
In modern Ukrainian practice, in most cases, social policy is the answer
to the emerging social problems. Such problems can become serious threats
to the society; therefore, they require a quick and effective solution. But
there are also problems, such as the aging of the population, which, rstly,
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poses a threat to the future, and secondly, their resolution requires time.
Thus, understanding the essence of risks and problems and the causes of
their emergence is extremely important for justifying social policy, as it
helps to nd adequate ways to solve them.
The analysis of the causes of existing problems, the demographic and
economic situation in the country, enables us to model the prospects for
socio-economic and human development, and, therefore, to anticipate
possible threats in the future. Therefore, social policy should be aimed at
preventing possible problems in the medium and long term. Such a task
of social policy must be ensured by appropriate instruments of economic
regulation, among which one of the most important are budgetary
mechanisms.
Adoption of the Budget Code of Ukraine in 2001 caused fundamental
changes in the whole budget system of Ukraine and became the rst step
in its reform in accordance with the Constitution of Ukraine and EU norms
and standards. From the point of view of human development regulation, it
is important that the Budget Code clearly lays down, on a long-term basis,
revenues and expenditures between the linkages of the budget system on
the basis of the differentiation of powers on the provision of public services
nanced from budget funds between different levels of government and
local self-government, and a distinction in the budget process participants
functions is made.
The differentiation of expenditures in the Budget Code of Ukraine on
education, health care, social protection and social security, housing and
communal services, between budgets of different types makes it possible to
identify levels of government and, consequently, those parts of the budget
system that have the greatest impact on one or another component of
human development. An analysis of the consolidated budget expenditure
structure makes it possible to determine the type of budget that is most
closely related to a specic aspect of human development, which in the
future allows to predict the emergence of social risks associated with the
imperfection of funding mechanisms used at various levels of the executive
branch more accurately (Skydan, 2009).
Budget expenditures should improve the welfare of the society and
increase the quality of life of the population; therefore, they should promote
the expansion of human development opportunities, by preventing or
minimizing social risks. However, to achieve this goal, there is a need to
resolve the methodological issue – how to ensure the maximum impact of
future taxes and fees and budget expenditures on human development at
the stage of budget planning, and at the stage of budget implementation,
monitoring and evaluating the effectiveness of changes in the state of
human development in the country caused by these costs. The basis for
developing such a methodology on regulating human development through
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
budget mechanisms is the scientic rethinking of the concept and essence
of the budget by dening its role in shaping human development based on
state social policy.
The realization of the social policy goals can be achieved through
the application of various mechanisms for solving social problems. The
effectiveness of social policy is achieved through the choice of priority
social problems at all stages of development of the economy, which are then
reected as the main tasks of the economic, including budget, state policy.
Thus, social priorities refer not only to quality and standard of living,
health care, education, culture, and ecology, but also to quality and level of
nancial support.
2. The structure of the scal mechanism of social risks public
management
The scal mechanism of public management of social risks is proposed
to interpret as a means of consistent implementation of organizational
and economic actions based on objective laws, basic principles, target
orientation, functional determinacy, using appropriate nancial and
budgetary methods and tools aimed at achieving the goal, which is to
prevent and minimize the effects of social risks of human development. In
other words, it is a system of nancial methods, levers and tools used by
public authorities to directly and indirectly inuence society as a whole and
individual social groups, along with appropriate regulatory, organizational
and information support. The components of the mechanism are presented
in Table 1.
Table 1. The structure of the scal mechanism of social risks
public management
Components Content
Goals Prevention and minimization of the social risks’
consequences for human development
Objects of
management
State and local self-government bodies
Subjects of
management
- Society as a whole
- Separate social groups
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CUESTIONES POLÍTICAS
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Tasks
- Providing social assistance to those members of
society who are not able to support themselves
- Social insurance in case of illness, unemployment,
etc.
- Production and acquisition of those material goods
and services, which the state is responsible to
provide
Principles
- Rationality
- Efciency and effectiveness of using budget funds
- Addressing assistance
- Subsidiarity
- Coherence of budgetary and social policy goals
- Harmonization of the compensatory and
investment nature of nancial support
Methods
- Direct budget nancing
- Program budgeting
- Budget nancing of social sectors
- Strategic planning
- Compulsory state social insurance
Tools
- Direct impact: state social standards (poverty line,
minimum wage), state social guarantees, monetary
benets, allowances, subsidies, targeted programs,
targeted subventions to local budgets.
- Indirect impact: budget expenditures on education,
health care, culture, subventions, national social
insurance, insurance premiums
Let us examine the features of individual components of the nancial
and budgetary mechanism of public management of social risks. The
implementation of social policy by the state or local authorities is based
on the application of state guarantees, standards, as well as rules and
regulations, which makes their use an integral part of the social policy.
These state guarantees and standards are established at the legislative level
in the laws on the state budget for each year, that is, they are the basis for
the formation of the social component of state and local budgets. At the
same time, in the formation of an active social policy in the eld of human
development in modern Ukraine, there is a need not only to determine the
budget resources based on standards and guarantees, but also to develop
budget mechanisms, without which it cannot be activated both at the state
and at the regional levels (Skydan, 2011).
Budget policy is one of the most effective tools of state regulation of
socio-economic development of the country. The purpose of scal policy,
like any other, is a specic result, different from that already exists, or one
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
that promotes the improvement, development and increase of the efciency
of the process or the nal product/service. Considering the above, many
countries have now begun to use methods of budgeting focused on socially
meaningful results. In each country, the methods of budgeting can be
called differently – for example, result-based budgeting, performance or
productivity management, program-target method. However, all of them
have a common goal, which is to achieve a specic, usually long-term result,
which best meets the needs of society. And since such a result should also
be sufciently objective, measurable and predictable, a distinctive feature
of such methods of budgeting is a system for assessing the quality of budget
services and the effectiveness of scal policies in general.
All this makes it possible to assert that budgetary tools, namely direct
expenditures, centralized purchases, intergovernmental transfers, etc.,
are regulators of social and economic development. In addition, taking
into account that the main components of human development, such as
education, health care, social protection and social security, belong to
the main budget spheres in Ukraine (i.e., their expenditures are almost
entirely formed at the expense of budgetary funds), some aspects of human
development can be effectively regulated through the use of special budget
mechanisms and tools, in particular, potential social risks can be inuenced.
Budget expenditures are capable of actively inuencing human
development through, rst, supporting the socially unprotected sections
of the population, nancially ensuring the functioning of institutions and
conducting research, in particular in the areas of health care, education
and ecology. At the same time, this inuence is conditioned by the budget
structure, that is, the structure of the budget system and the functional links
between its elements. In turn, the budget structure, in particular the system
of local budgets and their relations with the state budget, are determined by
the state structure and the administrative-territorial division of the country.
According to the budgetary system, in Ukraine nancial support for the
expansion of human development is carried out both from the state budget
and from the local budgets, which determines the need to study the degree
of inuence and the relationship between the level of the budget, which
nances, and the amount of funding and human development. But it is
necessary to consider the theoretical basis of the budget impact on human
development based on determining the relationship between the budget
and social policy in general. The budget signicantly affects the state of
the socio-cultural sphere: education, health care, housing and communal
services, social protection and social security and culture. It is these areas
that provide the most basic preconditions for human development, which
prevents the emergence of social risks. The tasks solved in the direction of
spending public funds, can be divided into three groups:
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- providing social assistance to those members of society who are
not able to provide themselves independently. For example, the
allowances paid to disabled children.
- provision of social insurance in case of illness, unemployment, etc.
For this category of expenses, unlike the previous one, the essence
of the process is not limited to redistribution, there is a peculiar pre-
accumulation of funds, including personal, insured for the purpose
of the next payment with the occurrence of the insured event.
- production and acquisition of material goods and services, which the
state assumes the responsibility for.
In this context, “social expenditure of the budget” is not only a system of
nancing, but also a system of social rights and guarantees of the population,
expressed by a set of relevant state standards and budgetary mechanisms to
ensure these rights, and guarantees. The Constitution of Ukraine, adopted
at the fth session of the Verkhovna Rada of Ukraine on June 28, 1996 is
the basic document in which the rights of citizens to social protection, a
sufcient standard of living for themselves and their families, health care,
medical care and health insurance are secured.
According to Art. 46 of the Constitution of Ukraine, citizens have the
right for support in the event of full, partial or temporary disability, loss of
breadwinner, unemployment due to circumstances beyond their control,
and also in the case of aging. The Constitution provides that this right is
guaranteed by compulsory state social insurance at the expense of insurance
premiums of citizens, employers, as well as budget and other sources of
social security (Skydan et al., 2019).
Consequently, the social policy of the state should take into account the
demands of all social strata of the population, promote the establishment
of an optimal balance between the incentives of the economic activity of
the able-bodied population and the social protection of those who need it,
between measures aimed at solving promising and current social problems.
Thus, the principle of rational social policy is the need for a reasonable,
economical and at the same time effective spending of limited social
resources at the state level, and at the level of regions and enterprises. The
principle of the effectiveness of the budget system determines that when
drafting and executing budgets, all participants in the budget process
must strive for achievement of the planned goals with the attraction of the
minimum amount of budget funds and achieve maximum results with the
use of the budget determined by the amount of money.
The principle of targeting – the most urgent in the modern social policy
of Ukraine. The impossibility of providing state support to the entire
population is explained by resource constraints and the expansion of the
spectrum of priority social services. Privileges for certain categories of
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Fiscal mechanism in public administration of social risks
the population that the government seeks to distinguish from the general
population are provided on a professional or service basis to certain
categories of citizens. The limited budget resources put the state in the
position of refusing general support of the entire population and providing
specic assistance to the socially vulnerable groups of the population (large
families, people with disabilities, refugees, etc.) who urgently need it. At
the same time, there is a question of cutting off the social security system
of those strata of the population that have economically succeeded and no
longer need this support.
This principle is closely linked to the principle of subsidiarity of
the budgetary system, according to which the distribution of types of
expenditures between the state budget and local budgets, as well as between
local budgets, should be based on the greatest possible approximation of
the provision of public services to their immediate consumer. Therefore,
the lack of implementation of one of these principles of social policy causes
the corresponding negative consequences for budgetary policy. Ensuring
targeting of payments from the budget is realized in two aspects:
- from the point of view of horizontal efciency, combating poverty is
effective when assistance is provided to all who need it.
- from the point of view of vertical efciency, to maintain cost growth,
assistance should be provided only to those who really need it.
In the area of social policy, it is, rst of all, about vertical efciency,
since it directly relates to budget expenditures for assistance. At the same
time, horizontal efciency is also important, because the impact of poverty
eradication depends on it. Therefore, the basis for effective interaction
between the budget and social policy is the solution of how the state should
establish and ensure social standards and guarantees for citizens in need,
in the face of limited budget funds. According to the law, the denition
of the right to assistance for all social programs should be based on the
subsistence minimum (SM).
In addition, this indicator should become a peculiar benchmark for
the establishment of other national minimum social standards, such as
minimum wages, minimum old-age pensions, unemployment benets,
other types of social allowances and benets. In this regard, two important
parameters are important: the SM value itself and the correction coefcient,
which will determine the amount of the total income of the family, which
gives the right to receive social assistance (the level of provision of SM).
When determining the value of SM, it must be taken into account that
it must ensure the implementation of constitutional guarantees to the
citizens of Ukraine, and the appointment of social assistance (in particular,
the denition of the level of provision of SM) must be nancially justied.
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However, only the focus of the system of social protection on measures
of compensatory nature in relation to certain groups of the population,
attempts to solve the poverty problem by increasing scal distributive
processes, increasing the amount of social expenditures in the total
expenditure of the state without increasing the effectiveness of social
programs will not solve the main social problems. After all, an increase
in the volume of budget expenditures directed towards the needs of social
protection does not yet testify to the success of social policy. There may be a
number of negative phenomena in the form of ineffective management and
bureaucratization of the social protection system, the abuse and fraud of
some recipients of social benets, injustices, disparities in assistance to low-
income people living in different regions and having different demographic
and economic characteristics.
Way out of this situation may be in changing the ideology of the budget
process from the implementation of social expenditures of the budget to the
implementation of budget investments aimed at human development. Such
a transition should be based on the denition of the essence of investment
in human development. Determining the subject and the subject of
investment is the basis of understanding the essence of investment in
human development. The object of such investments is the social sphere
and housing and communal services in the form of specic industries,
enterprises, organizations, and people, which constitute the social structure
of society.
Education, health care and welfare are the most important spheres in
the structure of human development. These directions in the structure of
the budget correspond to expenditures on education, health care, social
protection and social maintenance of the population and housing and
communal services as an industry that is associated with the creation of
decent living conditions and work of a citizen. Therefore, the relationship
between the use of budgetary funds and the state of human development
should be considered in the context of these industries.
In our opinion, the main direction of improving the nancial and
budgetary mechanism of public management of social risks should
be minimization of the compensatory nature of nancial provision of
consequences of social risks and activation of the use of investment
instruments for preventing their occurrence. In view of this, harmonization
of social and scal policies is mandatory on the basis of real forecasts
of socio-economic development and the introduction of medium-term
budget planning. In this context a great importance is turned to the Budget
Declaration – a strategic document that should agree the basic principles of
scal and social policy.
To date, the Budget Declaration is not a complete strategic document,
since it does not contain a link to the macroeconomic forecast, the analysis
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
of the level of achievement of goals proclaimed in the previous year, as well
as the analysis of the potential impact of the proposed budget decisions
on the country’s socio-economic situation in the medium-term perspective,
on expanding the capabilities of human development. Therefore, it is
necessary to restructure the Budget Declaration and thereby conceptually
change its role in the budget process, giving it the status of a full budget
document, which will mean completion of the rst stage of the budget
process. Therefore, to ensure effective regulation of human development,
the structure of the Budget Declaration should contain separate sections
that will reect:
- an estimation of the relationship between budget expenditures and
achieved indicators of human development over the past year.
- existing strategic goals of social policy, regarding human development,
which need to be addressed through implementation of budgetary
policy measures.
- proposals for solving these problems (directions of scal policy in
clear correspondence with the strategic goals of social and economic
policy of the state and mechanisms for its implementation in each
direction.
- forecast of the main parameters of the budget for the planned year
and the medium-term perspective. Such a forecast should include
a generalized structure of budget revenues and a detailed structure
of budget expenditures according to functional classication,
intergovernmental scal relations and a list of budget programs
aimed at human development.
- an assessment of the regulatory impact or expected social outcomes,
including changes in the human development situation as a result
of the medium-term implementation of the budget policy measures
envisaged in the declaration.
Thus, in addition to establishing the political component of the budget
process, the distribution of the projected amount of budget resources for the
planned year and the medium-term perspective according to the branches
and main programs for human development should be carried out at this
stage. The methodological approach should be based on the assessment
of existing current budgetary commitments and social guarantees of the
state to citizens (a certain level of wages, social benets, pensions). Such
an assessment, in turn, should be based on determining the future value
of the budget service, taking into account the impact of all factors that
may increase this value, among which: the projected amount of ination,
increase or decrease in the payroll, increase or decrease of certain social
criteria that are the basis for the calculation of wages, transfers to the
population (the size of the subsistence minimum, the minimum wage, etc.).
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To take full account of the nancial needs for measures aimed at
achieving certain goals, in social policy, such goals can be reected in
the form of established standards for the provision of social services to
the population. But if we consider the whole budget system rather than
its separate components, this approach seems rather complicated, which
takes a lot of time to develop and test the methodology for determining
the standards, and then the methodology for calculating the corresponding
need for nancial resources. Therefore, without diminishing the relevance
of the introduction of social service standards as an important component
of scal policy, it is necessary to consider human development standards
as a necessary component of scal policy, starting with the rst stage of the
budget process.
Conclusion
Social risk of human development is a separate type of risk, representing
a measurable share of the potential danger of deviations from social norms
in the system of social relations, processes and activities. Social risks
can have economic, physiological, occupational demographic and social
character. Depending on the compensation method, social risks may be
insurance and non-insurance. In the aggregate, social risks are the basis for
the construction and functioning of the state system of social protection,
nancial and material mechanisms, which are designed to ensure the
implementation of the right to social security for any person who needs it.
It is proved that effective interaction of the budget and social policy
will solve the question: how the state should establish and provide social
standards and guarantees to the citizens who need them, in the face of
limited budget funds. The research substantiates the essence and structure
of the scal mechanism of public management of social risks of human
development, species the subject and object of management, denes the
general principles, methods, tools, logical schemes of the functioning of this
mechanism with the allocation of management techniques on which they
are based. It was determined that the orientation of the system of social
protection to compensatory measures in relation to certain groups of the
population, attempts to solve the problem of poverty by strengthening scal
distributive processes, increasing the number of social expenditures in the
total expenditure of the state without increasing the effectiveness of social
programs will not solve the main social problems.
The main direction of improvement of the scal mechanism of public
management of social risks should be minimization of compensatory
nature of nancial provision of social risks consequences and activation of
investment tools application for prevention of their occurrence. In view of
this, harmonization of social and scal policies is mandatory on the basis
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Volodymyr G. Bulba, Maryna V. Goncharenko y Oleksandr V. Yevtuxov
Fiscal mechanism in public administration of social risks
of real forecasts of socio-economic development and the introduction of
medium-term budget planning. In this context the Budget Declaration, a
strategic document that should harmonize the basic principles of scal and
social policy, is therefore important.
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Esta revista fue editada en formato digital y publicada
en enero de 2021, por el Fondo Editorial Serbiluz,
Universidad del Zulia. Maracaibo-Venezuela
Vol.39 Nº 68
