Valentyna Makohon

Economic changes create a strong need for the reconsideration of the system of financial and budgetary knowledge and paradigms already created in developed countries regarding the possibility of their use in the countries with developing economies. In this article, the authors clarify that the process of formation of the efficient and mutually agreed budget policy with strategic tasks of the social and economical development of countries requires development of the budget strategy. Its essence is the dynamic realization of the system of goals, principles, directions, tasks of state authorities, co-ordination and adequacy of their long-term regulatory measures to internal and external changes in the economic environment and social transformations aimed at ensuring macroeconomic stability, accelerating economic growth and improving the well-being of the population. The principles of budget strategy development have been clearly defined: scientific substantiation; integrity; efficiency; systematic approach; adaptability; variability; interdependence; purposefulness; sociality; legitimacy. The share of government expenditures, budget deficit and public debt in the gross domestic product in the EU and Ukraine has been estimated. The priority directions of budget strategies in the conditions of economic transformations have been defined, in particular, regarding the increase of efficiency of public expenditures and establishment of restrictions on their level of growth; improvement of the mechanism for managing budget deficits, public debt and guarantees and reduction of their limits. The research has demonstrated a huge influence of the budget strategy on the social and economical processes and on the development of the social relations.

In the conditions of institutional transformations, the issue of raising the budgetary policy prudence level, strengthening its impact on socio-economic processes becomes relevant, especially in emerging countries. This paper delivers the essence and role of budgetary policy in ensuring the macroeconomic stability and social welfare in the emerging countries. The approaches to budget policy vectors in terms of budget revenues and expenditures, budget deficits, and public debt are presented. The article provides a detailed analysis of public debt service ratio, the proportion of the budget deficit, and public debt to GDP in national currencies of emerging countries to the US dollar during 2000–2018. The authors outlined the budgetary policy objectives, summarized and systematized the approaches to its implementation in the emerging countries in the conditions of institutional transformations. The article identifies the features of medium-term public debt management strategies in the emerging countries, in particular in terms of marginal indicators of the budget deficit and public debt, improvement of the debt management system, maintaining the debt portfolio optimal structure. The impact of budgetary policy on social and economic processes is proved.

The world economic globalization determines the feasibility of rethinking fiscal system knowledge on the formation and implementation of debt policy in the countries with transformation and advanced economies. In order to improve the system of public administration, the proper level of financing of innovation-investment projects, the important task is to improve the effectiveness of debt policy instruments and to ensure the consistency of its components. This article describes the essence of debt policy. The features of formation and implementation of the EU and Ukraine’s debt policy in the public administration system are defined in the context of institutional transformations. The authors assess the share of gross debt of the EU countries and the sovereign debt of Ukraine in GDP; conduct a regression analysis of the impact of public debt in GDP on real GDP growth in Ukraine. The article discusses the debt policy tasks, summarizes and systematizes the approaches to its implementation in different countries. The authors identify the features of public debt management strategies in terms of marginal indicators of the budget deficit, public debt, and instruments for improving the effectiveness of the public debt management system. The impact of debt policy on country’s financial and economic security is substantiated.

The COVID-19 pandemic has intensified the issue of strengthening the financial support of human capital development and enhancing its impact on economic growth. This study aims to assess the impact of financial support of human capital development in terms of public spending on health and education on economic growth. Economic-statistical methods and correlation-regression analysis are used to determine the impact of the share of public spending on health and education in GDP on real GDP, and to assess the characteristics of financial support of human capital development. The study reveals evidence of a link between the level of public funding for human capital development and real GDP. At the same time, for Ukraine and the countries-full members of the Commonwealth of Independent States, in particular Armenia, Azerbaijan, Kazakhstan, Moldova, Belarus, the Kyrgyz Republic, Uzbekistan, and Russia, the results of the study were mixed. In recent years, with the share of public spending on health and education in GDP growing by 1 percentage point, real GDP has grown in 4 and 5 countries, respectively, and decreased in 5 and 4 countries out of 9 studied. The results show that a significant deterrent to strengthening the financial support of human capital development and its impact on economic growth is a significant level of uncertainty in economic processes, which determines the importance of revising the forms and methods of public financing of human capital.

Large-scale military actions on Ukraine’s territory have led to extraordinary challenges for budget policy. This study aims to evaluate the budget policy of Ukraine and substantiate its strategic priorities in martial law. The paper used economic and statistical methods to assess the ultimate budget indicators. It was determined that budget revenues decreased due to the economic recession, and expenditures, primarily for defense and security, increased. In 2022, compared to 2021 (the full-scale war against Ukraine began on February 24, 2022), tax revenues decreased by 7.6%. In contrast, the study observed an increase in budget expenditures by 65.0%, in the budget deficit by 4.5 times (financed mainly by external borrowings and military bonds bought by the National Bank of Ukraine), and in state and guaranteed state debt by 52.4%. In the context of military operations, the budget policy aims to ensure a balance between financing the most critical items of the budget and stimulating the economy’s recovery. At the same time, the institutional capacity of state authorities allows controlling how a country survives in this challenging period. In order to restore the economy, the Ukrainian government must implement a prudent budget policy, assess fiscal risks associated with changes in the macroeconomic environment, and increase the efficiency of budget expenditures.

The dynamics of socio-economic processes requires the general government revenue to be adapted to changes in financial and economic conditions. The study aims to improve the scientific and methodological approach to general government revenue in the system of fiscal regulation. The impact of general government revenue on economic growth was estimated using a correlation-regression analysis and the multiplier effect concept. The authors found out that, in order to ensure the macroeconomic stability and accelerate the economic growth in conditions of transformational changes, it is reasonable to increase the share of direct taxes in the general government revenue structure, to implement the prudential and coherent fiscal policy with the strategic goals of the countries’ social and economic development. The authors substantiated that the increased share of direct taxes of the consolidated budget of Ukraine in GDP by one percent causes the real GDP to grow by 2.94 percent, whereas the increased share of the indirect taxes by one percent causes the real GDP to decrease by 0.45 percent; for 2014–2018, 28 percent of taxes are on average withdrawn per unit of GDP growth. The study results indicate that effective fiscal regulation is ensured only by the synergy of its fiscal, regulatory, and incentive functions, the reconciliation of fiscal sustainability and tax neutrality principles.

Acknowledgment
The article was prepared on the subject of the GDR: “The Financial and Budgetary Strategy for Economic Growth” (No. 0119U100577).

The investment policy of the state is an important tool for diversifying the economy. This paper analyzes the share of capital investment in GDP, the index of fixed capital investment for 2015–2019, and assesses the investment policy determinants of the state of developed countries and emerging countries. Correlation-regression analysis methods were used to determine the relationship between real GDP, the share of industrial output in GDP, and the index of fixed capital investment in countries with economies in transformation. As a result, it was determined that in the vast majority of countries studied, the increase in investment in fixed assets contributes to the acceleration of economic growth, and the level of economic growth determines the investment potential of countries; that the heterogeneity of the impact of investment on the level of economic growth in countries with transformational economies is due to their raw material orientation, insufficient level of validity and predictability of the implemented investment policy of the state; the state’s investment policy is an important tool for ensuring macroeconomic stability and stimulating economic growth in a recession. Using the data of the panels for the period from 2015 to 2019, it is substantiated that the creation of conditions for macroeconomic balance will increase business activity of enterprises, which is the result of purposeful influence of state investment policy on economic processes by ensuring quality transformation and innovation of the national economy. The obtained results show that the level of influence of the state investment policy on the level of economic growth varies significantly depending on the level of development of financial institutions in the country and the infrastructure of the financial market.