Public fin. resources, 2024
84.5%
▲ of GDP · +39.5 pp vs 2018
A scholarly study of the essence, formation, distribution and use of public financial resources in Ukraine, and of the strategic guidelines for reforming the system that manages them under wartime uncertainty.
DOI: 10.32342/3041-2137-2026-2-65-6
The article reveals the relevance of public financial resources management. It is noted that such management is based on general and special principles that must be taken into account when developing and making management decisions. The object, subjects and subject of public financial resources management are considered.
The approaches to the interpretation of financial resources, which are ambiguous, and the classification of the financial resources of society are clarified. Analyzing various statements of scientists and conducting our own research, the differences between financial resources and capital and monetary resources are revealed. The definition of public financial resources as a component of the financial resources of society is given.
The dynamics of the sources of public financial resources of Ukraine and their composition, structure, results of the distribution and use of public financial resources are reflected, and the dynamics of the ratio of Ukrainian budget expenditures and revenues of budgetary institutions during 2018–2024 are analyzed.
The main problems that caused the change in approaches to reforming the public financial resources management system are revealed. The focus is on the strategic guidelines of such reform — in particular, changes in the state’s approaches to budget and tax discipline in the medium term, increasing the efficiency of the distribution of public financial resources at the level of state policy formation, and improvement of financial legislation to ensure proper implementation of state and local budgets.
JEL classification: G28, H50, H60, H61, H70, H73, H79
In conditions of wartime, political and economic uncertainty, and external and internal challenges and threats, the modernization of public finance management remains a highly uncertain reality.
Given the large volumes of public financial resources — more than 40% of GDP in pre-war times and 84.5% of GDP in 2024 — the problems of reforming the management of these resources are very relevant. Building an effective management system and defining strategic guidelines for its reform should be carried out in compliance with general and special principles.
Successful work on existing problems requires strategic guidelines that would optimize the sources of formation, distribution and use of public financial resources, enabling state and local self-government bodies to qualitatively perform their constitutional functions.
Scholarly interest in public financial resources and their management dates back to 1924, when the first work devoted to the problem was published — although practical questions arose with the establishment of the market economy.
I. Volokhova, S. Dzherelejko, Ya. Dropa, T. Kolomoiets, H. Kucher, K. Romanchuk, S. Salnikov, A. Khomutenko, I. Chuhunov, I. Skulysh and others substantiate approaches to defining the financial resources of society and public financial resources, their composition, sources of formation, and directions of distribution and use.
In modern conditions, information on the dynamics and state of public finances can be obtained from the websites of the Ministry of Finance of Ukraine, the Pension Fund of Ukraine, and the State Statistics Service of Ukraine. Effective management decisions depend on the availability of a real information base.
The Financial Resources of Social Insurance. Reveals problems of distributing financial resources among the state, employer and employee, and reserves for increasing their amount.
Managing Financial Resources. Treat management as the complex issues of financial planning and control — performance indicators, cost analysis, profitability and financial monitoring.
The Power of Information. Examine how U.S. news rankings affect the financial resources of public colleges — the link between information dissemination and required resources.
Analyzes access to financial resources for low-income groups and small enterprises, linking the concept of “financial resources” to the social sphere.
Use “financial resources” to reveal problems of reducing state funding for certain pensioners and the consequences that follow.
Preserving Natural Capital. Applies “financial resources” to characterize the dependence of economic assets worldwide and the problems of preserving natural capital.
Different approaches to the essence of financial resources — grouped as monetary resources, capital, financial assets, monetary income, accumulations, income and revenues, monetary funds — prevent precise information and effective management directions.
On most government sites such information is absent or limited (Treasury, Tax and Customs services). Since 2022 the Ministry of Finance stopped issuing the “Budget of Ukraine” statistical compilation; the State Statistics Service excluded almost half of the National Accounts indicators and all finance-related ones.
Ineffective tax and customs systems; weak management of fiscal risks, state assets, debt and liquidity; imperfect distribution of resources due to absent forecasting and medium-term budget planning, intergovernmental relations, procurement, investment, accounting and control issues.
Financial science distinguishes three interrelated parts in every management system — the object, the subject and the predicate of management.
State financial flows, state financial resources, state centralized and decentralized monetary funds, and the revenues and expenditures of the state — a complex, multifaceted phenomenon spanning all levels of governance and the driver of the entire economic system.
State and local authorities, local self-government bodies, heads of sectoral and territorial structures, and heads of state-owned enterprises, organizations and institutions. Effective management requires thorough knowledge of the object.
The theoretical-methodological and practical foundations of the object — conditioned by objective financial relations connected with the distribution and redistribution of GDP, which characterize the essence of public finance.
A set of interrelated and interdependent management actions and functions, techniques, forms, methods, instruments, levers, incentives and sanctions, aimed at managing state financial flows, resources, centralized and decentralized monetary funds and financial plans of the state — to achieve the strategic goals of Ukraine’s socio-economic development and the qualitative, effective fulfillment by the state of its constitutional functions.
A set of monetary funds created as a result of the distribution and redistribution of GDP by all subjects of financial relations, in order to ensure the fulfillment by these subjects of their tasks, functions and obligations.
A set of monetary funds of the public sector of the economy, created as a result of the distribution and redistribution of GDP, national wealth and external sources by public subjects of financial relations — to achieve their final goal and fulfill their specific tasks, functions and obligations in accordance with the strategy of state financial policy.
Public financial resources are a component of the financial resources of society, which can be classified by form of ownership, by the role of subjects of financial relations, and by the level of centralization.
Fig. 1. Classification of the financial resources of society. Compiled by the authors.
Diagrams scroll horizontally on small screens →
Despite many common features, financial resources have characteristics not inherent to capital or to monetary resources, so identifying them is inappropriate. The authors distinguish them as follows.
Public financial resources are formed at the expense of GDP, national wealth and external sources, and are concentrated in the state budget and state target funds.
Fig. 2. Formation and distribution of public financial resources. Compiled by the authors.
Fig. 3. Distribution and use of public financial resources. Compiled by the authors.
The current period is characterized by very high growth rates in the volume of public financial resources, their share in the financial resources of society, and their share in GDP.
UAH billion, 2018–2024 (2024 — expected)
% of GDP, 2018–2024
From 45.0% of GDP in 2018 to 84.5% in 2024 (+39.5 percentage points). The surge reflects wartime financing from foreign aid and international financial organizations.
UAH billion — Consolidated Budget vs Social insurance funds (stacked), 2018–2024
Total PFR rose from ₴1,602.4 bn (2018) to ₴5,800.1 bn (2024), +262.0%. The Consolidated Budget grew +295.5% and now forms 85.2% of PFR; social insurance funds grew +143.1%.
% of GDP, components of GDP by use, 2018–2023 (Table 1)
The wage fund of employees grew +123.4% and rose from 41.4% to 49.6% of GDP, while taxes on production and imports fell from 16.2% to 13.2% of GDP.
UAH billion — in Consolidated & State Budget expenditures, 2018–2024
% of social-cultural expenditures, 2018–2024
In 2024 own revenues reached 70.2% of social-cultural expenditures in the Consolidated Budget and 104.2% in the State Budget — exceeding those expenditures by 4.2%, a trend impossible in peacetime.
The Cabinet of Ministers of Ukraine, by Order No. 1805-r of 29.12.2021, approved the “Strategy for reforming the public finance management system for 2022–2025”, which defines five strategic foundations for modernization.
Build a modern, fair tax system (better administration, taxpayer service, a wider tax base); modernize the customs system; improve management of fiscal risks and state assets; modernize state and local debt management through the Debt Agency, the domestic securities market and longer-term targeted financing; and improve liquidity management.
Develop an effective mechanism of macroeconomic and budget forecasting and strategic planning; strengthen the strategic approach to medium-term budget planning; raise the efficiency of budget spending through the program-target budgeting method; and reform intergovernmental relations and fiscal decentralization.
Optimize the public procurement system; define strategic guidelines for managing state investments; improve the quality and reliability of public-sector accounting; ensure efficient, transparent treasury servicing of budget funds; and reform internal state financial control and independent external financial control.
Increase transparency and accessibility of budget information, expand citizen participation in the budget process, build a modern and effective IT-management system, and pursue further digital development of public financial resources management.
Develop human resource management in the sphere of state finances to strengthen the quality of personnel potential for the effective formation and practical implementation of state financial policy.
Management of public financial resources is proposed as a set of interrelated and interdependent management actions and functions, techniques, forms, methods, instruments, levers, incentives and sanctions — directed at state financial flows, resources, centralized and decentralized monetary funds and financial plans of the state — to achieve the strategic goals of Ukraine’s socio-economic development and the qualitative, effective fulfillment of its constitutional functions.
Public financial resources are a set of monetary funds created through the distribution and redistribution of GDP by all subjects of financial relations to ensure the fulfillment of their tasks, functions and obligations. Created from GDP, national wealth and external sources, they are a component of the financial resources of society — and the modern period is marked by rapid growth in their volume and their share of GDP.
Reform guidelines comprise: ensuring general budget and tax discipline in the medium term; developing real directions for more efficient resource distribution at the policy level; creating optimal conditions and instruments for effective budget implementation; engaging citizens for transparency, inclusiveness and accountability; and modernizing human resource management in public finance.