Level of wellbeing in the countries of V4 group according to the different assessments

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State Tax University

Computer and Information Technologies and Systems Department

Department of Automated Management of Technological Processes

Level of wellbeing in the countries of v4 group according to the different assessments

T. Ratushnyak, PhD in Ph.-Mat., Ass. Professor

O. Hladchenko, PhD in Ped. Sci., Ass. Professor

А. Omelchuk, PhD in Tech. Sci., Ass. Professor

Ya. Vyshemirska, Assistant Professor

Annotation

Organizations and state institutions monitor the socio-economic development of countries in order to analyze and assess the standard of living of citizens. The assessment of the socio-economic state of the country includes a wide range of parameters that reflect various aspects of human life and the country's economy as a whole. The article analyzes the level of well-being in Ukraine and the countries of V4 Group (Czech Republic, Hungary, Poland, Slovak Republic,) and examines the factors affecting it. An analysis of socio-economic indicators characterizing public welfare in Ukraine in 2017-2022 was carried out. The following macroeconomic indicators and socio-economic indicators were compared: GDP per capita, GDP per capita by PPP, Human Development Index (HDI), Legatum Welfare Index (LPI), World Happiness Index (HPI), Ecological Footprint, Green GDP, Inclusive Wealth Index (IWI), Better Life Index (BLI).

Research determined spheres which need to be reformed in Ukraine for the development of the state: Safety and Security, Investment Environment, Infrastructure and Market Access, Economic Quality, Living Conditions, Health, Natural Environment. Reforming can be based on the experience of those countries of the European Union with which Ukraine closely cooperates. The V4 Group can act as such countries: the V4 Group policy towards Ukraine has been developing since 2004 and is part of the process of supporting and developing the EU's Eastern Partnership.

The article is carried out as part of the scientific research work "The use of intelligent technologies in the analysis of economic risks of the regions of Ukraine. and V4 countries” (state registration number: 0121U114593), the customer of which is the State Tax University. It was determined that the Czech Republic, which is the leader among the V4 countries in terms of all indicators of well-being, can be an example of successful reform of the country for Ukraine.

Keywords: public wellbeing, level of citizens' life, macro index, social and economic index, V4 countries.

Анотація

Рівень добробуту у країнах вишеградської групи за різними оцінками

Т.В. Ратушняк, к. ф.-м. н., доцент кафедри комп'ютерних та інформаційних технологій і систем, Державний податковий університет

О.В. Гладченко, к.п.н., доцент; А.А. Омельчук, к.т.н., ст. викладач кафедри комп'ютерних та інформаційних технологій і систем, Державний податковий університет

Я.С. Вишемірська, ст. викладач кафедри автоматизованого управління технологічними процесами, Таврійський національний університет імені В.І. Вернадського

Державні установи та міжнародні організації проводять моніторинг соціально-економічного розвитку країн з метою аналізу та оцінки рівня життя громадян. Оцінка соціально-економічного стану країни включає в себе широкий спектр параметрів, які відображають різні аспекти життя людини та економіки країни в цілому.

У статті аналізується рівень добробуту в Україні та країнах Вишеградської групи V4 (Чеська Республіка, Угорщина, Польща, Словацька Республіка) та досліджуються фактори, що на нього впливають. Проведено аналіз соціально-економічних показників, що характеризують суспільний добробут в Україні у 2017-2022 роках. Порівнювались такі макроекономічні показники та соціально-економічні індекси: ВВП на душу населення, ВВП на душу населення за ПКС, Індекс людського розвитку (ІЛР), Індекс процвітання (LPI), Індекс світового щастя (HPI), Екологічний слід, Зелений ВВП, Інклюзивний індекс добробуту (IWI), Індекс кращого життя (BLI).

Дослідження визначило сфери, які потребують реформування в Україні: безпека та захист, інвестиційне умови, інфраструктура, якість економіки, житлові умови, здоров'я, природне середовище. Реформування може базуватися на досвіді тих країн Європейського Союзу, з якими Україна тісно співпрацює. Такими країнами може виступати Вишеградська група: політика групи V4 щодо України розвивається з 2004 року і є частиною процесу підтримки та розвитку Східного партнерства Європейського Союзу. Визначено, що Чеська Республіка, яка є лідером серед країн V4 за різними показниками добробуту, може бути для України прикладом успішного реформування країни.

Статтю підготовлено в рамках науково-дослідної роботи «Використання інтелектуальних технологій в аналізі економічних ризиків регіонів України та країн V4» (номер держреєстрації: 0121U114593), замовником якої є Державний податковий університет.

Ключові слова: суспільний добробут, рівень життя громадян, макроіндекс, соціально-економічний індекс, країни Вишеградської групи.

Statement of the problem in a general form and its connection with important scientific or practical tasks

Ukraine signed the Association Agreement with the European Union, which entered into force on September 1, 2017. In addition, on June 22, 2022, Ukraine received the status of a candidate for EU membership. The conditions for Ukraine's accession to the EU are reforms that would ensure the coordination common values in all spheres of social life:

- implementation of European standards of justice, freedom and security with the view to ensure the rule of law and fundamental freedoms;

- completion of transition to market economy by adapting existing Ukrainian legislation to the EU standards;

- approximation of Ukrainian policies to the EU in accordance with the fundamental principles of macroeconomic stability, coordination of state finances and balance of payments;

- creating conditions for closer cooperation in other fields of mutual interest of Ukraine and the EU.

Reforming can be based on the experience of those countries of European Union with which Ukraine closely cooperates. The V4 Group (Czech Republic, Hungary, Poland, Slovak Republic,) can act as such countries: the V4 Group policy towards Ukraine has been developing since 2004 and is part of the process of supporting and developing the EU's Eastern Partnership [1].

Chapter 21 of the EU-Ukraine Association Agreement is devoted to cooperation in the sphere of social policy. Article 420 of Chapter 21 reveals the objectives of such cooperation, where the priority is given to the improvement of quality of life [2].

Quality of life, or well-being, reflects economic and social welfare of the population and involves a wide range of aspects: production, defined by property relations, level of material outcome of society, services and social labor productivity. It also covers various lifestyles, needs for life benefits and possibilities to meet those needs by supplying goods and services on the market, household income of the citizens. Thus, the people's well-being depends on a number of economic, social, political, cultural, innovative, environmental and other factors.

Organizations and government agencies conduct monitoring socio-economic development of the countries in order to analyze and assess the level of citizens' life. By monitoring we mean a set of tools used to collect and process information for assessing the social and economic status of the country, for predicting forthcoming events, and identifying threats to its sustainable development [3].

Monitoring of the country social and economic status provides the government with data to develop sustainable policy and rational decision making. Basic data for monitoring is furnished by official statistics.

Assessment of the country's social and economic status involves a wide range of metrics which show diverse aspects of human life and of economics of the country on the whole. In the European Union, different approaches for measuring well-being are used, therefore the study of these approaches and the analysis of measurement results are relevant for Ukraine as a potential EU member.

International Monetary Fund (IMF), founded in 1945, for quite a long time had been using Gross National Product (GNP), i.e. the total value of final goods and services developed by the country within a year, as the main macroeconomic indicator of welfare regardless of the geographic location of its enterprises.

Since 1991, the United Nations (UN) has recommended IMF to use Gross Domestic Product (GDP) as main macroeconomic indicator, i.e. the total value of final goods and services produced by residents irrespective of the ownership of the consumed economic resources. The high level of GDP was considered a key indicator of welfare in the country.

The method of calculating GNP and GDP and countries ranking, based on the values of these indicators, are published on the official website of the UN and in other sources [4, 5]. In addition to GDP other important macroeconomic indicators are: national production volume, the overall price level in the country, interest rate, employment.

While not denying the importance of macroeconomic indicators to measure quality of life, modern scientists, politicians and public figures maintain that traditional metrics is not perfect, and suggest new approaches to estimating the public welfare. Those approaches are disclosed in the following documents [6, 7]: the Istanbul Declaration adopted by the World Forum on Measuring and Fostering the Progress of Societies, the Communication from the Commission "Beyond GDP - Measuring Progress in a Changing World"; a global project "Measuring Social Progress" of the Organization for Economic Cooperation and Development (OECD); the recommendations of Stiglitz-Sen-Fitoussi Commission on Measuring Economic Performance and Social Progress etc.

The relevance of such research is confirmed by the fact that in October 2015 Angus Deaton was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty and welfare. Deaton's works help to solve complex practical problems for economists - to determine the poverty line in developing countries. Calculation of the average income is one of traditional ways to determine the level of welfare and poverty, but this approach is not exact, since it ignores the shadow incomes and their seasonal fluctuations. Deaton proposes to determine the level of well-being and poverty through the calculation of consumption (costs) at the individual level.

Analysis of recent research and publications. The first official attempt to change the traditional method of measuring the quality of life was Human Development Index (HDI), introduced by Amartya Sen and Mahbub ul Haq.

HDI is understood as generalizing relative index, calculated on the basis of other parameters, by a particular formula or methodology. Thus, it is a composite index that takes into account such indicators of social and economic development, as life expectancy, level of education, level of income. Methodology of HDI calculation, and countries' ranking according to its value, are published under the United Nations Development Programme annual report [5] starting from 1990.

HDI is a complex index, which is calculated by statistical averages of each country. It does not adjust for internal inequality of certain citizens. Later the 2010 Human Development Report alongside with HDI introduced three new indices: Inequality-Adjusted Human Development Index (IHDI), Gender Inequality Index (GII), Multidimensional Poverty Index (MPI).

Further efforts to improve the methodology of assessing well-being resulted in introducing alternative socio-economic indices. Among them are [2, 5, 8-10]: The Legatum Prosperity Index, Happy Planet Index, Happy Life Index, Green GDP and others. These socio-economic indices vary in statistical data and scoring techniques. Innovative scoring of certain indices alongside with statistical data also involved the use of data from current opinion polls.

Ukrainian scientists [1, 3, 11] explore the level of prosperity in Ukraine on certain macroeconomic indicators and indices provided by international statistical institutions and the State Statistics Service of Ukraine. However, in order to analyze the quality of the implemented reforms, the State Statistics Service of Ukraine needs to introduce socio-economic indicators that are used in the EU.

Formulation of the purpose of the article. We will review the current socioeconomic indicators that are used in the EU and analyze the level of wellbeing in the countries of V4 Group in 2017-2022 according to these indicators. As a result of the study, it is planned to establish a leader among the V4 countries to adopt the experience of public administration. The article is carried out as part of the scientific research work "The use of intelligent technologies in the analysis of economic risks of the regions of Ukraine and V4 countries" (state registration number: 0121U114593), the customer of which is the State Tax University.

Presentation of the main research material

1. Legatum Prosperity Index (LPI) is a composite index that highlights social and economic achievements of 167 countries. It has been published since 2006 by the Legatum Institute (Great Britain). According to Jeffrey Gedmin, the director of the Institute, Prosperity Index is the only tool that measures national prosperity based on both wealth and wellbeing.

LPI considers 89 different variables [10], systematized and selected into twelve groups according to the following social and economic areas: Safety and Security, Personal Freedom, Governance, Social Capital, Investment Environment, Enterprise Conditions, Infrastructure and Market Access, Economic Quality, Living Conditions, Health, Education, Natural Environment. Statistical data for scoring indices are obtained from official sources of international statistics: the UN Human Development Report, the World Bank report on "The World Development Indicators", OECD, World Trade Organization (WTO), World Intellectual Property Organization (WIPO), International Data Corporation, and from authoritative sources that continually study public opinion: Gallup Institute, Economist Intelligence Unit, etc.

2. World Happiness Index (HPI), the new index of socio-economic development of countries, was proposed in 2006 by the New Economics Foundation (NEF), British research center. The majority of people want to live a long and happy life and the state (government) should ensure the welfare of the citizens, without compromising the environment. Bearing that in mind Nick Marx, the author of the index, offered alternative for assessing social and economic development. The formula for calculating HPI has the following form: HPI« Experienced Wellbeing * Life Expectancy / Ecological Footprint.

Data sets from the Gallup World Poll and World Values Survey are used to evaluate the well-being of the citizens. Sociological survey is based on the question "What is your level of well-being on the scale of 0 to 10?” and performed among 1000 respondents, aged from 15 years across over 150 countries. The result of the survey is the index Ladder Of Life (Scale of Life), which equals the index Experienced Well-being and reflects the welfare of citizens. According to the survey area of values of Ladder of Life index belongs to the segment [0; 10].

Data for Life Expectancy indicator were obtained from the UN Human Report. The area of values of the indicator belongs to the segment [20, 85].

Ecological Footprint is a quantitative indicator of the environmental burden which defines the area necessary for providing the population with food and neutralization of industrial wastes [11]. The planet Earth area is taken as unit of measurement for Ecological Footprint. Data for Ecological Footprint were obtained from Global Footprint Network. Methodology for determining HPI index and ranking of 152 countries on this index were published online [8].

3. "Green GDP" (or Environmentally-Adjusted Domestic Product, EcoDomestic Product) is a macroeconomic indicator of the environmental impact and social costs of economic production and consumption in a country.

Measuring "Green GDP" is especially important for the countries with resource- based economies. Although some scientists and scholars have proposed general methodological approaches to calculating "Green GDP" index [12], the unified method of measuring has not been offered.

4. The 2012 UN Inclusive Wealth Report first offered to use Inclusive Wealth Index (IWI) as Green GDP. According to Achim Steiner, project manager of the UN Environment Programme (UNEP), IWI index tends to be more accurate indicator of the country's material wealth than GDP. It will promote sustainable development and elimination of poverty. UN Inclusive Wealth Report gives a list of countries with decreasing natural resources and recommends investing in reproducible natural resources. The last report "Inclusive Wealth Report" [13] of the UN was published in 2018.

5. Better Life Index (BLI) is a composite index that covers the social and economic achievements of 41 countries (38 members of OECD and 3 candidates for admission to the organization). BLI has been published since 2011 and accounts for 24 indicators being selected and assembled into eleven groups according to social and economic areas (life indicators): housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety, work-life balance [9].

Statistical data for calculating the indicators are obtained from OECD, UN, national statistical agencies, Gallop Institute. Innovation of Better Life Index is the realization of opportunity to set the weight of each of eleven areas. Information technologies allowed to make this index interactive. The methodology of calculation and index values are published [9] for 41 countries, where Ukraine was not included. Table 1 - table 2 represents the result of monitoring the values of GDP [4, 14], for Ukraine and V4 countries for years 2017-2022.

Table 1

Tables 4, 5 represent the result of monitoring the values LPI [10] for Ukraine and V4 countries for years 2017-2022.

Tables 4

Source: formed on the basis of [10].

Table 5

Table 6 represents the result of monitoring the values HPI [8] for Ukraine and V4 countries for years 2017-2020.

Table 6

Література

1. Грицина О.В., Горбовий А.Ю., Богач М.М. Цифрова трансформація фінансової системи України та країн V-4 в умовах євроінтеграції. Наукове видання Львівського національного університету природокористування. 2023. 318 с.

2. Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part. Official Journal of the European Union. 2014.

3. Ратушняк Т.В. Моніторинг якості життя населення. Державне управління: удосконалення та розвиток.2014. №10.

4. Державна служба статистики України.

5. Human Development Reports

6. UNDP Annual Report 2022

7. UNESCAP.

8. Happy Planet Index.

9. OECD Better Life Index.

10. The Legatum Prosperity Index.

11. Вишемірська Я.С. Використання хмарних технологій у соціально-економічних дослідженнях екологічного спрямування. Збірник наукових праць Державного економіко-технологічного університету транспорту: економіка і управління. 2016. №37. С. 150-157.

12. Handbook of National Accounting: Integrated Environmental and Economic Accounting (2003), Studies in Methods, vol. 61, rev.1, series F.

13. Inclusive Wealth Report.2018.

14. International Monetary Fund.

15. World Bank Open Data.

References

1. Hrytsyna, O.V. Horbovyi, A.Yu. and Bohach, M.M. (2023), Tsyfrova transformatsiia finansovoi systemy Ukrainy ta krain V-4 v umovakh ievrointehratsii [Transformation of the financial system of Ukraine and V4 countries in the context of European integration], Naukove vydannia Lvivskoho natsionalnoho universytetu pryrodokorystuvannia, Lviv, Ukraine.

2. Official Journal of the European Union (2014), “Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part”

3. Ratushniak, T.V. (2014), “Monitoring the quality of life of the population, Derzhavne upravlinnia:udoskonalennia ta rozvytok, vol. 10

4. State Statistics Service of Ukraine (2023), “Macroeconomic statistics”

5. United Nations Development Programme (2022), “Human development report 2021-22”

6. United Nations Development Programme (2022), “UNDP Annual Report 2022”

7. UNESCAP (2023), “Statistics”

8. Happy Planet Index (2023), “The data over time”

9. OECD Better Life Index (2023), “Create your better life”

10. The Legatum Centre for National Prosperity (2023), “The 2023 Legatum Prosperity Index”

11. Vyshemirska, Ya.S. (2016), “Vykorystannia khmarnykh tekhnolohii u sotsialno-ekonomichnykh doslidzhenniakh ekolohichnoho spriamuvannia” [The use of cloud technologies in socio-economic studies of environmental direction], Zbirnyk naukovykh prats Derzhavnoho ekonomiko-tekhnolohichnoho universytetu transportu: ekonomika i upravlinnia, vol. 37, pp. 150-157.

12. United Nations Statistics Division (2003), “Handbook of National Accounting: Integrated Environmental and Economic Accounting”, Studies in Methods

13. United Nations Environment Programme (2018), “Inclusive Wealth Report 2018”

14. International Monetary Fund (2023), “IM Data”

15. The World Bank (2023), “World Bank Open Data”

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