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Management of Social Expenditures of the State Budget as a Component of Ensuring the Social Function of the State
Mitchenko K. F.

Mitchenko, Kostiantyn F. (2025) “Management of Social Expenditures of the State Budget as a Component of Ensuring the Social Function of the State.” Business Inform 11:745–745.
https://doi.org/10.32983/2222-4459-2025-11-745-745

Section: Finance, Money Circulation and Credit

Article is written in Ukrainian
Downloads/views: 0

UDC 336.14:338.2:355.01

Abstract:
The article is dedicated to a comprehensive study of the theoretical foundations and practical mechanisms for managing social expenditures of the State budget as a critical component of ensuring the social function of the State under conditions of full-scale military aggression and severe financial resource shortages. The relevance of the topic arises from the need to find effective tools of State budget policy capable of ensuring not only the country’s defense but also the functionality of the education, healthcare, and social protection systems, while simultaneously maintaining the quality of human capital and fostering social cohesion during military aggression. Within the study, the essence of social expenditures is revealed as the key instrument for implementing the social function of the State, aimed at addressing the priority tasks of developing education, healthcare, and social protection for the population. The theoretical foundations of social expenditure management have been analyzed, in particular the principles of fairness and efficiency in resource allocation, the theory of public goods, the conception of results-oriented management, and the program-target method of budgeting, which form the methodological basis for optimizing spending in the social sector. Based on a comprehensive analysis of expenditure trends for the period 2021–2025, significant disparities in funding across the main areas of the social sector have been identified and systematized: underfunding of healthcare (2.6% of GDP versus 7–8% in OECD countries), excessive concentration of educational spending on teachers’ salaries with insufficient funding for material and technical infrastructure, and a critical reduction in spending on the development of social services (from 1–2% to 0.2% of social sector expenditures). It is substantiated that the consistent reduction of the share of social expenditures from 30–35% in 2021 to 12% in 2025 is systemic in nature and poses a clear risk of social crisis and destabilization. The possibilities and limitations of various mechanisms for optimizing social sector expenditures under conditions of limited budgetary resources were evaluated, including the redistribution of expenditures within available limits, the implementation of program-targeted budgeting, strengthening control over spending and combating corruption, and engaging alternative sources of financing. The effects of different mechanisms on the quality and accessibility of social services, the sustainability of the social protection system, and the long-term prospects for human capital development were analyzed. Drawing on the international experience of developed countries and those that have faced similar wartime situations, a comprehensive set of recommendations for optimizing the management of social expenditures was developed. Mechanisms have been proposed for implementing a program-targeted approach to budgeting, strengthening public oversight and transparency in spending, increasing the targeting of social assistance, redistributing expenditures to eliminate imbalances, attracting alternative sources of funding, and introducing a system of medium-term budget planning. The practical significance of the results obtained lies in their potential direct application by government authorities in the formulation and implementation of budget policy under martial law conditions. The implementation of the proposed recommendations will help improve the efficiency of limited budget resource use; ensure a fair and effective allocation of social spending; promote the development of democratic institutions and civil society; and create conditions for social cohesion during the military conflict and sustainable State development, enabling recovery from the consequences of the ongoing armed aggression and post-war reconstruction in the following period.

Keywords: social spending, expenditure management, program-target approach, expenditure optimization.

Bibl.: 10.

Mitchenko Kostiantyn F. – Postgraduate Student, Department of Accounting and Finance, National Technical University «Kharkiv Polytechnic Institute» (2 Kyrpychova Str., Kharkіv, 61002, Ukraine)
Email: [email protected]

List of references in article

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