Baltic Journal of Economic Studies (Jan 2022)
HOW DOES ACTIVE DIGITAL TRANSFORMATION AFFECT THE EFFICIENCY OF GOVERNANCE AND THE SUSTAINABILITY OF PUBLIC FINANCE? THE UKRAINIAN CASE
Abstract
The challenges of the digital economy are leading to radical changes in public governance, creating conditions for convenient and prompt access to public services and public information. Moreover, the pandemic has caused drastic changes in the use of digital public service – it has become a necessity. Ukraine has significant prerequisites for the development and effective transformation of public administration to a higher technological level. Furthermore, during the time of crisis (2013-2014, 2020-2021), the government priorities were shifted to support digital transformations to improve the effectiveness of public administration and ensure the sustainability of public finance. The purpose of the paper is to investigate and assess a correspondence between efficiency of governance and sustainability of public finance based on digital transformations under the Ukrainian approach. The main scientific question was: How does the active digital transformation in public governance affect the sustainability of public finance in Ukraine? Methodology. Seeking the solution, own methodological developments were used; correlation analysis of main indicators of government effectiveness and sustainability of public finance was estimated. To assess the impact of digitalization on public governance efficiency, Ukrainian governance practices over the past 13 years were analyzed, expressed by indicators of governance effectiveness, through the introduction of digital technologies. Results. Based on empirical research, it has been found that due to several limitations, a strong direct relationship between active digital transformation and the sustainability of public finances (debt security) has not been identified. But at the same time, significant progress has been made in efficiency of public governance through the implementation of costly but effective digital change. This correspondence is especially noticeable during the crisis caused by the pandemic (2020-2021), during which the involvement of citizens in digital services is very high. Practical implications and value/originality. The convergence of synergies between key aspects – public governance, digitalization, finance, and security – has great potential for relevant solutions that provide a broader view of sustainable development issues. It can be noted that this issue is extremely relevant for further research in the field of public administration and finance in the context of sustainable development of the digital economy.
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