THE DIVERGENCE OF FINANCIAL SCIENCE IN THE CONTEXT OF THE GENESIS OF PUBLIC FINANCE THEORY

Abstract

Introduction. Financial science in Ukraine is still characterized by a state-centered approach to analyzing fiscal processes. It remains the theory of government finance, while in the West, in the course of scientific divergence, the theory of public finance has emerged, which derives their determinism from individual interests and needs. Purpose is to study the historical aspects of the theory of public finance in the process of evolutionary divergence of financial sciences. Methods. The methods of comparison, logical analysis and historical method of scientific knowledge are used in the work. Results. The process of historical divergence of financial science has been investigated, which has outlined some areas that explore public finance, corporate finance and personal finance. It is revealed that the origins of public financial management belong to the antique period, and the final awareness of the publicity of finances is laid since the establishment of constitutionalism in European countries. It is proved that the term “finance” at the time of its origin is used to describe the payment system, where the boundaries between the king's personal finances, public funds, government and bank credit are erased. It is shown that at the turn of the XIX–XX centuries, Western economic thought followed the divergence of financial science in three independent directions. It is found that the concept of “public finance” was only introduced into the scientific community at the end of the 19th century, and the use of the term “finance” is fixed in the area of corporate finance. It is established that the foundations of scientific study of financial phenomena based on deductive method and abstract approach are laid by the classical school of political economy. It is proved that the analysis of taxes and public expenditures in relation, through the prism of individual interests and subjective value, made a methodological revolution and became the last step towards the formation of the modern theory of public finance. Conclusions. The priority of domestic financial thought is its transition from the theory of government finance to the theory of public finance in the context of integration into the conceptual paradigm of Western financial science.