Funding for sustainable development of rural communities: European experience
DOI:
https://doi.org/10.51599/are.2024.10.04.09Keywords:
rural communities, sustainable development, funding, EU policies, EU joint budget, EU structural funds, financial support, Ukraine.Abstract
Purpose. The study aims to assess the European experience of funding for sustainable development of rural communities and the possibility of its implementation in Ukraine.
Methodology / approach. The research was carried out using the following methods: bibliometric, trend, cluster – to assess the scientific productivity of research, identify key trends in scientific approaches to the issues under study; comparative, systemic, institutional and functional analysis – to determine the functional links between different elements of the European Union (EU) funding system, as well as correlation and regression analysis – to establish the degree of interconnection between different sources of funding for rural communities in the EU member states.
Results. The authors conducted a cluster analysis and built a bibliometric map of the distribution of publications by country for the search query “sustainable development” and “sustainable rural development funding” in the Scopus database between countries for the period 2000–2024. This allowed to form a clear scientific picture of the development of the studied issues, as well as to establish the relevance, complexity and interdisciplinarity of approaches to solving the outlined tasks. It has been proved that the common budget is an instrument for implementing policies and programmes that promote economic growth, social cohesion, and stability in the EU, helping member states solve problems and achieve the Sustainable Development Goals. It is emphasised that the EU budgetary policy affects the eligibility conditions and criteria for the allocation of funds and thus reflects the EU’s political priorities, among which sustainable development of rural areas and communities is among the key ones. The composition and structure of financial instruments used for the sustainable development of rural communities in the EU under the Cohesion Policy were clarified. The main funding instruments for rural communities in EU member states, including loans, grants, capital or quasi-capital, and guarantees, are highlighted. It is emphasised that using the EU’s experience in funding sustainable development of rural communities, Ukraine can successfully continue its path to European integration, implementing the necessary reforms and using European resources to modernise and develop both communities and the economy as a whole.
Originality / scientific novelty. The study provides a deeper understanding of the funding mechanisms and their impact on the regional development of member states. An empirical study of the integration of various financial instruments, such as grants, loans, capital and quasi-capital, and guarantees, allows identifying new dependencies that have not been previously taken into account in research. The results contribute to scientific knowledge, deepening the understanding of the mechanisms of financial support for the sustainable development of rural communities.
Practical value / implications. The results of the study can be used by local governments in developing strategies for the socio-economic development of rural communities, particularly, the European experience of attracting and using financial resources can contribute to the achievement of economic, environmental and social parameters of sustainable development.
References
Kirilyuk, F. (2011). Mill John Stuart. Political Encyclopaedia. Edited by Y. Levenets, Y. Shapoval et al. (Eds.). Kyiv, Parliamentary Publishing House. Available at: https://shron1.chtyvo.org.ua/Levenets_Yurii/Politychna_entsyklopediia.pdf.
Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. W. (1972). The limits to growth. A report for the club of Rome’s project on the predicament of mankind. New York, Universe Books. Available at: https://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf.
Daly, H. (1973). Towards a steady-state economy. San Francisco, W. H. Freeman & and Company. Available at: https://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf.
Brundtland, G. (1987). Our common future. Report. World Commission on Environment and Development. United Nations. Available at: https://www.are.admin.ch/are/en/home/media/publications/sustainable-development/brundtland-report.html.
Holling, C. (2001). Understanding the complexity of economic, ecological, and social system. Ecosystems, 4, 390–405. https://doi.org/10.1007/s10021-001-0101-5.
Onishi, A. (2005). Futures of global interdependence (FUGI) global modelling system: an integrated global model for sustainable development. Journal of Policy Modelling, 27(1), 101–135. https://doi.org/10.1016/j.jpolmod.2004.10.002.
Hulse, J. H. (2007). Sustainable development at risk: ignoring the past. New Delhi, Cambridge University Press India Pvt. Ltd. Available at: https://idl-bnc-idrc.dspacedirect.org/server/api/core/bitstreams/307faddb-8f17-4f6e-b386-7532a3448312/content.
Adams, D. (1985). Effects of finance on rural development. In Undermining Rural Development with Cheap Credit. New York, Routledge. https://doi.org/10.4324/9780429270178.
Meyer, R., & Alicbusan, A. (1985). Farm-household heterogeneity and rural financial markets: insights from Thailand. In Farm-Household Heterogeneity and Rural Financial Markets: Insights from Thailand. New York, Routledge. https://doi.org/10.4324/9780429270178.
Ashley, C., & Maxwell, S. (2001). Rethinking rural development. Policy Review, 19(4), 395–425. https://doi.org/10.1111/1467-7679.00141.
Bell, S., & Morse, S. (2018). Sustainability indicators past and present: what next? Sustainability, 10(5), 1688. https://doi.org/10.3390/su10051688.
Dema, D., Abramova, I., & Nedilska, L. (2019). Financial and economic conditions of rural development in Ukraine. Eastern Journal of European Studies, 10(1), 199–220. Available at: https://ejes.uaic.ro/articles/EJES2019_1001_DEM.pdf.
Abramova, I., Nedilska, L., Kurovska, N., & Martynyuk, H. (2021). Financial inclusion in the context of sustainable development of rural areas. Management Theory and Studies for Rural Business and Infrastructure Development, 43(3), 328–336. https://doi.org/10.15544/mts.2021.29.
Abramova, I. (2019). Financial support for rural development: European experience. Scientific Horizons, 4(77), 21–26. https://doi.org/10.33249/2663-2144-2019-77-4-21-26.
Khirivskyi, R., Petryshyn, L., Pasichnyk, T., Brukh, O., Bernatska, I., & Kucher, L. (2020). Assessment and forecast of the efficiency of use of the financial resources of amalgamated territorial communities in the context of European integration. European Journal of Sustainable Development, 9(3), 607–615. https://doi.org/10.14207/ejsd.2020.v9n3p607.
Katenova, M., & Hoon Lee, S. (2020). A comparative study of financial literacy, retirement planning and delinquency in payment: the Kazakhstan case. Eastern Journal of European Studies, 11(1), 273–292. Available at: https://ejes.uaic.ro/articles/EJES2020_1101_KAT.pdf.
Zaiats, T., Romaniuk, S., Kraievska, H., Diakonenko, O., & Sova, O. (2024). Priority areas for the formation of capable territorial communities in Ukraine. Agricultural and Resource Economics, 10(1), 135–164. https://doi.org/10.51599/are.2024.10.01.06.
Tokarenko, O., & Matvienko, H. (2023). Strategic management of finances of territorial communities. Economy and Society, 47. https://doi.org/10.32782/2524-0072/2023-47-5.
Borisov, P., Petrov, K., & Tsonkov, N. (2024). Integration perspectives for improving regional policy in rural areas of Bulgaria. Agricultural and Resource Economics, 10(1), 260–283. https://doi.org/10.51599/are.2024.10.01.11.
Albeshchenko, O. (2022). European experience of sustainable development of the agricultural sector in rural areas. Economy and Society, 37. https://doi.org/10.32782/2524-0072/2022-37-1.
Alcidi, C. (2019). Economic integration and income convergence in the EU. Intereconomics, 54(1), 5–11. https://doi.org/10.1007/s10272-019-0783-6.
Esposito, V., Addeo, F., D’Auria, V., & Lenzi, F. (2023). The sustainability of emerging social vulnerabilities: the Hikikomori phenomenon in Southern Italy. Sustainability, 15(4), 3869. https://doi.org/10.3390/su15043869.
Patyka, N., Sokolova, A., Movchaniuk, A., Sysoieva, I., & Khirivskyi, R. (2023). Ukraine’s rural areas in the conditions of decentralisation and local self-government reform: challenges and prospects. Agricultural and Resource Economics, 9(3), 266–295. https://doi.org/10.51599/are.2023.09.03.12.
García-Feijoo, M., Eizaguirre, A., & Rica-Aspiunza, A. (2020). Systematic review of sustainable-development-goal deployment in business schools. Sustainability, 12(1), 440. https://doi.org/10.3390/su12010440.
Zhao, G., Zhang, J., Wang, Xu., & Su, H. (2023). Exploring ecological strategies for the sustainability of rural communities. Ecological Indicators,152, 110356. https://doi.org/10.1016/j.ecolind.2023.110356.
Crunțeanu, M., Comșa, M., & Fîntîneru, G. (2024). The impact of LEADER funding in Romania. Sustainability, 16(4), 1503. https://doi.org/10.3390/su16041503.
Nogueira, S., Fernandes, J., & Pires, L. (2024). The role of European funding in the development of rural tourism. In V. Katsoni, G. Cassar (Eds.), Recent Advancements in Tourism Business, Technology and Social Sciences. IACuDiT 2023. Springer Proceedings in Business and Economics. Cham, Springer. https://doi.org/10.1007/978-3-031-54338-8_35.
Kehagia, A., & Kyriazi, F. (2021). Structural funds and regional economic growth: the Greek experience. Review of Economic Analysis, 13(4), 501–528. https://doi.org/10.15353/rea.v13i3.3481.
Ge, H., Li, B., Tang, D., Xu, H., & Boamah, V. (2022). Research on digital inclusive finance promoting the integration of rural three-industry. International Journal of Environmental Research and Public Health, 19(6), 3363. https://doi.org/10.3390/ijerph19063363.
Jezierska-Thöle, A., Gwiaździńska-Goraj, M., & Dudzińska, M. (2022). Environmental, social, and economic aspects of the green economy in polish rural areas-a spatial analysis. Energies, 15(9), 3332. https://doi.org/10.3390/en15093332.
Khirivskyi, R., Yatsiv, I., Petryshyn, L., Pasichnyk, T., Kucher, L., & Irtyshcheva, I. (2022). Assessment of the efficiency of employment of the communities’ resource potential using different approaches. TEM Journal, 11(1), 367–373. https://doi.org/10.18421/TEM111-46.
United Nations (2002). World Summit on Sustainable Development, 26 August – 4 September 2002. Johannesburg. Available at: https://www.un.org/en/conferences/environment/johannesburg2002.
United Nations (2002). United Nations Summit on Sustainable Development, 25–27 September 2015. New York. Available at: https://www.un.org/en/conferences/environment/newyork2015.
European Commission (2019). The European Green Deal. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52019DC0640.
European Сommission (n.d.). The 2021–2027 EU budget – What’s new? Available at: https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/whats-new_en.
Legislative Observatory European Parliament (n.d.). A long-term vision for the EU’s rural areas – towards stronger, connected, resilient and prosperous rural areas by 2040. Available at: https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2021/2254(INI).
European Union (n.d.). Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No. 1698/2005. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32013R1305.
Verkhovna Rada of Ukraine (2015). On the Strategy of Sustainable Development “Ukraine – 2020”: Decree of the President of Ukraine of 12.01.2015 No. 5/2015. Available at: https://zakon.rada.gov.ua/laws/show/5/2015#Text.
Verkhovna Rada of Ukraine (2019). On the Sustainable Development Goals of Ukraine for the period up to 2030: Decree of the President of Ukraine of 30.09.2019 No. 722/2019. Available at: https://zakon.rada.gov.ua/laws/show/722/2019#Text.
Covenants of Mayors – East Partnership 2024 (n.d.). Available at: http://com-east.eu.
EU4Environment (n.d.). “European Union for Environment” – Ukraine. Available at: http://www.eu4environment.org.
Moroz, Y., Romanchuk, L., & Abramova, I. (2024). Features of financing the development of rural communities and territories at the expense of the EU’s common budget. Society and Security, 2-3(3), 9–18. https://doi.org/10.26642/sas-2024-2-3(3)-9-18.
Grytsyshen, D., & Abramova, I. (2024). Formation and implementation of EU financial mechanisms for sustainable development of rural communities. Taurida Scientific Herald. Series: Economics, (20), 67–78. https://doi.org/10.32782/2708-0366/2024.20.8.
Rogovyi, A., Yevtushenko, Y., & Piven, Y. (2024). Financial mechanism for the development of public private partnership in Ukraine. Investytsiyi: praktyka ta dosvid, 5, 38–42. https://doi.org/10.32702/2306-6814.2024.5.38.
Kosach, І. А., Zhavoronok, А. В., & Degtiarov, А. В. (2021). Financial mechanism of innovative and investment development of entrepreneurship: modern aspects. Problems of Modern Transformations. Series: Economics and Management, (1), 16–22. https://doi.org/10.54929/pmt-issue1-2021-03.
Kovalenko, Y., & Khelemskyi, V. (2023). Financing sustainable development and determining state policy vectors regarding capital investments in Ukraine. Naukova Vistula Collection of scientific papers of Odesa National Economic University, 11–12(312–313), 114–122. https://doi.org/10.32680/2409-9260-2023-11-12-312-313-114-122.
Shala, A., Perri, R. (2022). Regulatory barriers for fintech companies in Central and Eastern Europe. Eastern Journal of European Studies, 13(2), 292. https://doi.org/10.47743/ejes-2022-0214.
Nelson, K., & Nguyen, T. (2023). Community assets and relative rurality index: a multi-dimensional measure of rurality. Journal of Rural Studies, 97, 322–333. https://doi.org/10.1016/j.jrurstud.2022.12.025.
