Methodology for assessing the effectiveness of financing social expenditures considering the risk

Abstract

  Currently, all the prerequisites have been met for transitioning to the qualitatively higher level of public finance management that correspond to the generally accepted principles and international standards. The responsibility for choosing the most effective methods of public expenditure management increases with the development of innovation economy. This actualizes the problem of improving the state financing of social expenditures. The subject of this research is the assessment of the effectiveness of government spending in the area of social policy, considering the range of indicators that reflect socioeconomic development of the regions. The score is suggested for assessing the effectiveness of government spending in the area of social policy based on the standardized values of the criteria that describe the aspects of social policy of the regions and the peculiarities of their economic development. The proposed methodology for integrated assessment of the effectiveness of government spending takes into account the trends in the criteria that characterize the level of economic development of the regions, as well as possible variability of budget flows aimed at financing social expenditures. Practical implementation of such methodology allows classifying the territories by the level of efficiency of social expenditures, which facilitates rational financial decisions on the formation of resources that ensure sustainable economic growth and development of strong human capital.