Public finance in modern Ukraine: theoretical and practical aspect

Abstract

Introduction. In this article we analyze the sphere of public finance in Ukraine. In the theoretical aspect, domestic financial science does not pay enough attention to issues related to the conflicting combination of economics and politics in public finance, the interplay of political and financial theories in this field, and the application of behavioral models of various public finance subjects in scientific research. At the same time, there is a need for clarification of the structure and nature of public finance. Objective. To define the essence and structure of public finance based on well-established theoretical postulates; to investigate main trends in its development, problems, and ways of improvement in modern Ukraine using statistical data. Results. Foreign and domestic scholars not only interpret the concept of "public finance" differently but also include various components in it. Public finance is defined as the total amount of society's always limited monetary resources at the disposal of the state authorities and local self-government. Its formation and use require accompanying institutional and organizational activities based on the scientific groundwork produced by public finance theory. Over the past five years public finance in Ukraine has been characterized by conflicting trends with the defining factors being the global Covid-19 pandemic and Russia's full-scale war against Ukraine. In 2022, the share of expenditures of the consolidated budget and the Pension Fund reached a record high of 65.8% of annual GDP. The deficit of the consolidated budget has reached a record level. In these conditions, the government is implementing a forced but well-balanced active debt policy. The existing solidarity-based pension system significantly burdens and adds problems to Ukraine's public finance. Conclusion. To solve a series of accumulated problems in the field of public finance, what is needed first and foremost is peace in Ukraine after its victory. During the post-war reconstruction process, further reforms and measures should be taken to improve the state of public finance and bring it closer to international standards of efficiency, effectiveness, social utility, and security.