Balanced of countries development determinants: barycentric model

TETYANA VASILYEVA,

Department of Finance and Entrepreneurship,

Sumy State University, UKRAINE,

:

HANNA YAROVENKO,

Department of Economic Cybernetics,

Sumy State University, UKRAINE,

Educational and Scientific Institute “karazin Business School”, V.n. Karazin Kharkiv National University,

NADIIA SHYLOVTSEVA

V.n. Karazin Kharkiv National University, UKRAINE

determinants of the four spheres. The models' calculations were carried out taking into account three components:

the values of the composite targets (as a geometric mean), the level of pairs balance (as the sum of opposite pairs

of quadrilateral angles), and all four targets (as the distance between the actual and standard value of the center

of mass). According to the analysis result of the first component, developed countries have the most effective

targets (top five - Switzerland, Denmark, Norway, Finland, the Netherlands). Research of the results of the second

component has revealed an imbalance in target pairs for most countries. Determinants of socio-political

development are the most effective for developed countries. The economic sphere is most unbalanced for the

least developed countries. Various determinants can cause an imbalance for developing and new industrial

countries. The analysis of the center of mass distances revealed that not only developed countries could be

balanced, but also developing, new industrial and the least developed, that indicates a balanced development of

Today, the dynamic processes in society lead to

the fact that some areas of its life are not developing

evenly enough. It can be seen through the rapid

development of information technology, which has

led to the transformation of many processes in the

economic, political and social spheres over the past

decade. In this context, its consequences are more

to the construction of new IT companies, creation of

new jobs, human empowerment through the latest

developments. As for other aspects that also affect

the country's development, their impact can be both

positive and negative. Accordingly, this problem

needs to be studied and improved in identifying the

determinants that affect the country’s sustainable

development, balancing the needs of society and

protecting the future generations’ interests, and the

of balance of social, economic, political determinants

and determinants of digital capability and

cybersecurity, as composite targets, typical for any

country in the world. The formation of an appropriate

model will identify the targets that affect the

imbalance of the country's development, as well as

outline the relevant areas of government policy to

develop effective strategies that set priorities for

improving the population welfare, quality of social

and living standards, overcoming political and

2.1 Literature review

The country's balanced development assumes that

its changes are systemic and have an equal impact on

all areas. It can be ensured by several determinants,

among which the most influential are economic

(Kendiukhov & Tvaronaviciene, 2017). Significant

imbalances in countries' economies are caused by an

imperfect legal framework and the presence of a

corruption component, the impact of which violates

expenditure decentralization, revenue

decentralization and expenditure decentralization

simultaneously. The formation of a sustainable

development financing system is one of the main

strategic priorities, which should consider the

specifics of the functioning of the corporate sector

(Chigrin & Pimonenko, 2014; Brychko, 2013).

Kobushko et al. (2021) prove that money is not only

an instrument of payment but also acts as a tool for

propaganda and laundering of illegal income, which

leads to the development of the shadow sector of

economics. In turn, it affects the innovative potential

(Vysochyna et al., 2020a). The formation of a

favorable investment climate in the country is one of

the ways to improve the welfare of the country's

population, which is mathematically proven by

the formation of stable paradigms for its

improvement, which leads to qualitative changes in

social relations. However, social determinants form

the corresponding model of social life, the

consequences of which are the driver of sustainable

development (Dave, 2017). For this aspect, it is

crucial to ensure precisely social security when there

are minimal risks to the life of the population in the

country (Didenko et al., 2020). The formation of a

better social climate in the country is one of the

education (Lyeonov & Liuta, 2016) and the

healthcare system (Samoilikova & Kunev, 2020)

form a model of a prosperous society. The triad of the

(2019) have proved using the 2SLS method that

political instability negatively affects the country's

economic security.

determinants, environmental factors can also affect

the development of a country. This issue was

investigated by Lyeonov et al. (2019) and determined

a link between gross domestic product per capita,

greenhouse gas emissions, renewable energy in total

final energy consumption and green investments,

investigated the relationship between economic,

interaction of green investments and institutional

determinants manifests itself in the national

economy. It leads to a decrease in its energy

efficiency (Lyulyov et al., 2021b). The convergence

between tax and ecological systems has been proven

based on the beta and sigma convergence by

Vysochyna et al. (2020b). It also should consider that

world crises and global phenomena also directly

impact the balanced development of countries. The

processes. First of all, it has affected the dynamism

of the country's economic development and increased

the level of its national security (Novikov, 2021b).

Novikov (2021a) has proved, based on bibliometric

analysis of research, that the balanced development

of a country depends to a greater extent on its social,

economic and information security. Informatization

processes are also relevant for the economy's

financial sector, where there is the greatest need to

digitalize financial services (Pakhnenko et al., 2021).

massive cyberattacks, which destabilize processes

and systems and inhibit their development

(Yarovenko et al., 2021). Although most countries

development of the IT industry but also the direction

of information security (Leonov et al., 2019;

Vasylieva et al., 2017). The relationship between

them was investigated by Petroye et al. (2020) based

on correlation and cluster analyses.

A wide range of mathematical methods is used for

modelling economic, political, social, informational

development. Scientists have solved these problems

by building optimization models (Kozmenko &

Kuzmenko, 2011), structural modelling

Roienko, 2014), regression analysis (Shkolnyk et al.,

(Esmanov & Dunne, 2017). It is necessary to use a

more specific method, such as determining the center

of mass, to model the sustainable development. This

method will determine the level of balance based on

the development determinants. For the study, it has

been chosen a triad of economic, political and social

determinants, as well as determinants that

characterize the development of information

technology and cybersecurity, a group of which will

3.1. Economic, social, political determinants

and determinants of digital capability and

cybersecurity

countries’ development, which either increase or

decrease its level. The scientific knowledge methods,

which allowed to determine the most relevant

information technology, and is considered the

country with the highest level of information

security.

Factors of the country's economic development

form a key component in achieving its balance. They

enable to assess the citizens’ welfare level (The

Global Competitiveness Index), the conditions of

running the business in the country and protection of

property rights (Ease of Doing Business), the impact

Economic Development Index), human ability to

control their work and property, the level of own

consumption and investment (Economic Freedom

Index). The higher the country's economic

development, the more opportunities for it to be a

leader in world markets and ensure a high living

standard for its population. Among the selected

indicators, only the Uneven Economic Development

Index is a disincentive indicator, with the increase of

which the integrated level of the economic

living standard, which is to create favorable

conditions for the population to receive such social

benefits as education, quality health services,

potential as living standards, literacy, education and

longevity (Human Development Index) were

selected to analyze this composite target. The

selected determinants are stimulant indicators, so the

high integrated level of social dimension will indicate

a high level of social living standards in the country.

The political development of any country is an

integral part of its overall development, as it

describes the political life dynamics of the country,

its ability to interact with other countries in the

slow down economic development, so its evaluation

were chosen that measure: the probability that the

government can be destabilized or destroyed through

unconstitutional and violent nature (Political

Stability Index), the democracy quality in the country

based on assessments of the electoral process, civil

freedom, functioning of the government, political

culture (Democracy Index), quality of government

activities based on an assessment of the quality of

public services and bodies, quality of formation and

stability in the country and its high political

development.

provides the optimal ratio of its components. It

enables to be in balance and be stable in the event of

external factors. Accordingly, the country’s balanced

development shows the uniform or balanced

number of components that participate in evaluating

the development balance, a geometric figure is built,

the vertices of which are their composite values,

determinants which most characterize their

development. Accordingly, this article formed a

barycentric model.

of determining the center of mass for the economic

sciences. The authors developed a triangle model to

determine the stability of the insurance and

reinsurance market, focusing on the calculation and

analysis of the circumscribed circle radius. The

methodology of building a barycentric model for the

there were no practical calculations. Yarovenko

The method is based on the definition and analysis

of three components of the barycentric model: the

composite measurements, the balance of target pairs

and the balance of all four targets. It is necessary to

normalize the influencing determinants to find the

values of composite targets. This procedure is

required because the selected factors are different and

differ in their absolute values. Normalization will

reduce the values of all factors in the range from 0 to

the country. Otherwise, if it is closer to 0, it is the

development slowdown indicator.

There are different types of data normalization,

but this paper will use linear normalization for

stimulators (1) and Savage normalization for

destimulators (2), because the study data are spatial:

normalized determinants of economic, social,

political dimensions and digital capability and

cybersecurity dimension, defined for k-country;

coordinate area, the coordinates of which correspond

to composite targets. It is reasonable to build a

standard model and the actual data model to

understand how balanced the country's development

is. It is a square, the vertex coordinates of which are

equal to the maximum value of the target, i.e., 1. It is

a point with coordinates (1; 1) to measure digital

capability and cybersecurity, for the social dimension

- (1; -1), economic - (-1; -1), political - (-1; 1). The

points are connected by lines that form the sides of

Source: Yarovenko (2021).

It is quite difficult for empirical data to build a

barycentric model in the form of a square. Under such

conditions, the country has the same economic,

social, political, and information security levels. In

practice, different quadrangles can be obtained for

different countries, with different side lengths and

triangles and calculate their side lengths as the length

of segments to find the degree of angles in a

quadrangle and check the possibility of constructing

a circle around it, by the following formula (5):

where AB is the length of the segment between

two points A and B, which are the vertices of one of

the two triangles ABC;

quadrangle.

the two triangles by formula (6):

three sides in the triangle.

using special tables or calculators. In this article, the

calculations were performed using MS Excel

software, which uses the appropriate functions.

pairs of opposite angles in the quadrangle. If their

sums are equal to , we conclude that a circle can

be described around this quadrangle, i.e., the pairs of

dimensions are balanced.

(balance of four targets) is identified through

defining the centroid of the quadrangle. It involves

the calculation of its coordinates by formulas (7) -

(8):

where Ox and Oy – coordinates of the point О, that

is the centroid quadrangle;

(xi; yi), (xi+1; yi+1) – the coordinates of the vertices

of the quadrangle, where the vertex with coordinates

The balance of the four targets is determined by

obtaining the difference between the center of mass,

which corresponds to the data of a particular country,

and the center of mass of the standard model. Then,

we calculate this distance as the length of the segment

by formula (5). The closer the obtained value to 0, the

closer the center of mass of the country’s barycentric

model to the standard value, which indicates a

balanced development of the country based on its

by formula (5). The closer the obtained value to 0, the

closer the center of mass of the country’s barycentric

model to the standard value, which indicates a

balanced development of the country based on its

four composite targets.

4. Results

Authors took the data of selected determinants for

127 countries for 2018 for the study and calculations

from the sources of such organizations as The World

capability and cybersecurity. We will group countries

by economic development according to the

classification of the International Monetary Fund, to

analyze the results. Thus, they are divided into

developed, developing and least developed. We will

also single out among them a group of countries that

are considered to be newly industrial due to their high

rates of technological development, which acts as a

driver of their economic development. These include

Argentina, Brazil, Mexico, India, Malaysia,

Thailand, Chile, Indonesia, Turkey, China, Iran, the

Philippines (Corporate Finance Institute, September

10, 2021), and promising industrial countries from

the Group of Eleven (Nigeria, Egypt, Pakistan,

4.1. Analysis of the results of the composite

targets

composite targets of economic, social, political and

digital capability and cybersecurity for twenty

standard level (Figure 1) shows that for most

developed countries, their values go to 1 but do not

reach it. In practice, it is impossible for any country,

so the closer the calculated values go to it, the higher

the level of this dimension in the country. One should

note that Switzerland demonstrates the best result. It

has the highest total value of economic, social,

political, and digital capability and cybersecurity

dimensions (3.735).

dimensions for developed countries

Compared to the data obtained for developed

countries, a significant imbalance arises between the

social dimension and the cybersecurity, economic

and political dimensions. The differences are quite

significant. For example, for Poland the social

dimension target is 0.8357, digital capability and

cybersecurity - 0.7773, economic - 0.6533, political -

0.6410, and for Algeria - respectively 0.6542, 0.3486,

0.1365, 0.3002. The development of the economic

and its political laws and decisions. The economic

development instability of such countries is a direct

consequence of the crisis in their political sphere,

which leads to a slowdown in their development as a

whole. In other words, it is important for developing

countries, first of all, to strengthen the political

dimension by transforming legislation, combating

corruption, making more effective decisions by the

government aimed at economic development and

dimensions for newly industrialized countries

certain stages of socio-economic development and

achieved success or have all the chances for an

time, you can see the uneven development of all

dimensions, mainly economic. The obtained results