Anna Buriak, PhD, Associate Professor, American University Kyiv, Ukraine

ORCID ID: 0000-0003-0563-6967
e-mail: ann.v.buriak@gmail.com

Viacheslav Plastun, Doctor of Economics, Professor, American University Kyiv, Ukraine

ORCID ID: 0000-0002-8371-9592
e-mail: plastun.v@gmail.com

Vladislav Dombrovskyi, PhD, Associate Professor, American University Kyiv, Ukraine

ORCID ID: 0000-0001-5201-3518
e-mail: v.dombrovsky@gmail.com

Reaching SDSs Through Public Institutions and Good Governance: Why Trust Matters

Abstract. Introduction. The successful implementation of Sustainable Development Goals (SDGs) hinges on effective public governance and robust public institutions. SDG 16 emphasizes building accountable institutions at all levels, necessitating public trust in institutions and interpersonal trust among citizens, as trust influences policy effectiveness and public responses. The 2008 global financial crisis exposed a significant decline in trust in public and financial institutions, highlighting a critical need for restoration.

Purpose. This research aims to conceptualize trust as an emotional determinant of economic and social processes and to outline a multilevel framework for restoring trust within a country’s financial system. Furthermore, it presents a case study of ensuring integrity and transparency in Ukraine’s financial system, analyzed within the context of building effective institutions for SDG implementation following the 2014 reform.

Results. Trust is identified as a multidimensional and multilevel concept, comprising interpersonal, institutional, and systemic components. Interpersonal trust fosters cooperation and reduces transaction costs. Systemic trust reflects confidence in the overall economic system, with price and financial stability as key indicators. Institutional trust is vital for good governance and policy compliance. Financial services globally remain among the least-trusted sectors. The proposed multilevel concept for restoring financial trust differentiates these components as sources of public confidence. Key drivers for institutional trust include competence, transparency, and integrity. The Ukrainian financial system reform faced initial challenges including high dollarization and declining lending. A significant issue was insufficient transparency, exacerbated by bank bankruptcies and insecure depositor rights. Analysis of Ukraine’s 10 largest banks (2018-2023) indicates average transparency, with ownership structure being most transparent. However, there are significant gaps in disclosing full financial information and the total cost of products and services, despite NBU efforts on corporate governance disclosure.

Conclusions. Achieving SDGs requires strong institutions built on trust, particularly in the financial sector. The multilevel trust concept provides a framework for restoration. To address transparency deficiencies in Ukraine’s financial system, this study recommends mandatory standardized disclosure requirements for financial products and services. These measures, including clear upfront information, enhanced consumer rights protection, and behavioral research application, are crucial for fostering trust, enabling informed consumer choices, and establishing long-term bank-customer relationships.

Keywords: good governance; public institutions; trust; financial system.

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