The Impact of the «Gray» Shadow Economy on the Socio-economic Security of a City
Romanovska Y. A.

Romanovska, Yuliia A. (2021) “The Impact of the «Gray» Shadow Economy on the Socio-economic Security of a City.” The Problems of Economy 3:100–109.
https://doi.org/10.32983/2222-0712-2021-3-100-109

Section: Regional economy

UDC 338.14:336.14

Abstract:
The article is aimed at presenting the guidelines for methodological principles helping to assess the impact of the «gray» shadow economy on the socio-economic security of a city. Such methodological principles are relevant due to the growing role of cities in the socio-economic development of Ukraine and the lack of methodological guidelines for assessing the impact of the «gray» shadow economy on the socio-economic security of a city. The existing official Guidelines for assessing the shadow economy level are aimed at obtaining estimates of the «gray» shadow economy at the macro-level, while the recommendations suggested by the Organization for Economic Cooperation and Development (OECD) to measure the unobserved economy remain mostly unapplied in Ukraine. The article presents methodological principles for assessing the impact of the «gray» shadow economy on the city budget, which combine interdependent concepts, principles and categories of assessment, whose operationalization as a developed algorithm has made it possible to create an operational assessment environment. The methodological principles for assessing the impact of the unobserved economy on the city budget are based on the principles provided and, due to the peculiarities of the object of assessment, require a number of assumptions to be made. The calculation of the amount of non-receipts in the budgets of several Ukrainian cities made according to the developed assessment algorithm shows that the budgets of the cities in question failed to receive significant sums during the selected period due to concealing business income, number of employees, and payment of wages "in envelopes". Of course, it is advisable to admit some conditionality of the amount of budget losses in the cities analyzed due to the «gray» shadow economy; still, even if we halve their size, the loss will remain significant. However, the negative impact of the shadow economy on a city is not limited to the lack of a significant amount of funds by the city budget. It is also necessary to take into account remote threats to the socio-economic system of the city due to the presence of the shadow economy, e.g.: deliberate limitation of the potential of the city's economic development and distortion of economic competition.

Keywords: city, social and economic security, «gray» shadow economy, influence, budget, losses, methodological principles, algorithm.

Fig.: 1. Tabl.: 6. Bibl.: 20.

Romanovska Yuliia A. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Finance, Vinnitsa Institute of Trade and Economy of Kyiv National University of Trade and Economy (87 Soborna Str., Vinnytsia, 21050, Ukraine)
Email: bogdana32rom@ukr.net

List of references in article

Semtsov, V. M. “Kvintesentsiia nesposterezhuvanykh ekonomichnykh protsesiv“ [The Quintessence of Unobserved Economic Processes]. Efektyvna ekonomika. 2017. http://www.economy.nayka.com.ua/?op=1&z=5694
“Measuring the Non-Observed Economy: A Handbook“. Paris : OCED, 2002. https://www.oecd.org/sdd/na/1963116.pdf
[Legal Act of Ukraine] (2006). http://zakon2.rada.gov.ua/laws/show/z0833-06
[Legal Act of Ukraine] (2009). http://www.me.gov.ua/LegislativeActs/Detail?lang=uk-UA&id=4bb297a0-c900-404f-8c6f-5f76f18b1503
“Izmereniye nenablyudayemoy ekonomiki: Rukovodstvo“ [Measuring the Non-Observed Economy: A Guide]. https://www.gks.ru/metod/izmer.pdf
Tiutiunyk, I. V. “Metodychni zasady otsinky obsiahiv tinyovykh finansovykh potokiv v ekonomitsi“ [Methodical Bases of Estimation of Volumes of Shadow Financial Streams in Economy]. Biznes-navihator. 2018. http://business-navigator.ks.ua/journals/2018/49_2018/44.pdf
Vilchynskyi, Yu. M. et al. “Filosofiia“ [Philosophy]. Kyiv : KNEU im. V. Hetmana, 2019. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjBp4_38trzAhWBvIsKHZTCA70QFnoECAIQAQ&url=https%3A%2F%2Fkneu.edu.ua%2Fget_file%2F9143%2F%25D0%2592%25D1%2596%25D0%25BB%25D1%258C%25D1%2587%25D0%25B8%25D0%25BD%25D1%2581%25D1%258C%25D0%25BA%25D0%25B8%25D0%25B9%2520%25D0%25AE.%25D0%259C.%2520%25D0%259D%25D0%25B0%25D0%25B2%25D1%2587%25D0%25B0%25D0%25BB%25D1%258C%25D0%25BD%25D0%25B8%25D0%25B9%2520%25D0%25BF%25D0%25BE%25D1%2581%25D1%2596%25D0%25B1%25D0%25BD%25D0%25B8%25D0%25BA%2520%25D1%2584%25D1%2596%25D0%25BB%25D0%25BE%25D1%2581%25D0%25BE%25D1%2584%25D1%2596%25D1%2597.pdf&usg=AOvVaw0ZyprVLa7NLikwGKh8DYlp
Horlach, M. I. et al. Osnovy filosofskykh znan [Fundamentals of Philosophical Knowledge]. Kyiv: TsUL, 2008.
Ivakin, O. A. Dialektychna filosofiia [Dialectical Philosophy]. Odesa: Yuryd. lit., 2003.
Kononyuk, A. Ye. Sistemologiya. Obshchaya teoriya sistem [Systemology. General Systems Theory], book 1. Kyiv: Osvita Ukrainy, 2014.
Semeniuk, E., and Melnyk, V. Filosofiia suchasnoi nauky i tekhniky [Philosophy of Modern Science and Technology]. Lviv: LNU im. Ivana Franka, 2017.
Popper, K. “Realizm i tsel nauki“ [Realism and the Purpose of Science]. In Sovremennaya filosofiya nauki: znaniye, ratsionalnost, tsennosti v trudakh mysliteley Zapada. Khrestomatiya, 92-105. Moscow: Logos, 1996.
Mochernyi, S. V. Metodolohiia ekonomichnoho doslidzhennia [Methodology of Economic Research]. Lviv: Svit, 2001.
Danylian, O. H., and Dzyoban, O. V. Metodolohiia naukovykh doslidzhen [Research Methodology]. Kharkiv: Pravo, 2019.
“Tinyova ekonomika v Ukraini. Rezultaty doslidzhennia 2019 roku. Doslidzhennia tinyovoi ekonomiky Kyivskoho mizhnarodnoho instytutu sotsiolohii v ramkakh proektu SHADOW“ [Shadow Economy in Ukraine. The Results of the 2019 Study. Research of the Shadow Economy of the Kyiv International Institute of Sociology within the Framework of the SHADOW Project]. http://kiis.com.ua/?lang=ukr&cat=reports&id=897&page=1&fbclid=IwAR1GSrnl6l4vk1GZE4QR9yekDt_C_NMIXJ-eA0mWArZpSC3DsCgwPsZ7unw
“Zahalni tendentsii tinyovoi ekonomiky u 2020 rotsi. Analitychna zapyska“ [General Trends of the Shadow Economy in 2020. Analytical Note]. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjAhJnCltbzAhUi_rsIHVk_CcsQFnoECAkQAQ&url=https%3A%2F%2Fme.gov.ua%2FDocuments%2FDownload%3Fid%3Dea52ab12-e08a-418f-8e80-7cdee5d1fddc&usg=AOvVaw1Oi3tc-Y908w4FUvWfUpH7
“Tinyova ekonomika. Zahalni tendentsii. 2020. Analitychna zapyska“ [Shadow Economy. General Trends. 2020. Analytical Note]. https://nrat.ukrintei.ua/tinova-ekonomika-zagalni-tendencziyi-2020/
Derzhavna sluzhba statystyky. http://www.ukrstat.gov.ua/
“Chislennost naseleniya po gorodam Ukrainy“ [Population by Cities of Ukraine]. Ministerstvo finansiv Ukrainy. https://index.minfin.com.ua/reference/people/town/
“Biudzhety mist“ [City Budgets]. https://openbudget.gov.ua/local-budget?id=16100000000