THE IMPACT OF THE WAR ON PUBLIC FINANCE AND GOVERNANCE: CHALLENGES AND SOLUTIONS

Abstract

The article explores transformational processes in Ukraine’s public finances and governance under the conditions of martial law, emphasizing the effects of wartime on the country's financial sustainability. It identifies challenges faced by the budgetary system, the currency market, tax policies, and the banking sector. The study addresses theoretical and methodological dimensions of resource management and stability in financial systems. Key aspects discussed include the reform of financial processes, modernization of financial tools, enhancement of anti-corruption mechanisms, and improved transparency in public finance operations. The research outlines how the wartime context requires significant adaptation in monetary policies, strategic risk management, and financial governance. The findings reveal that the military conflict significantly affects Ukraine’s economic and financial systems, increasing the need for comprehensive reforms. These reforms involve diversifying income sources, stabilizing budgetary frameworks, ensuring fiscal sustainability, and creating resilience in managing economic crises. The article also evaluates the role of international aid and donor programs in mitigating economic instability. Authors conducted a systematic review of scientific literature and data, classifying structural elements of financial stability and analyzing trends in financial governance during wartime. Moreover, the article examines practical measures such as restructuring fiscal priorities towards defense and social support, increasing accountability, and enhancing financial oversight mechanisms. The study highlights Ukraine’s dependence on external funding while emphasizing the importance of developing internal revenue strategies to reduce vulnerability to global financial shifts. Insights into strategic risk management practices suggest actionable steps for safeguarding financial stability, including maintaining reserves, fostering financial sector integrity, and adopting adaptive monetary tools. The authors conclude that addressing the financial challenges of martial law requires a balanced approach that integrates transparency, international cooperation, and innovation in public finance management. Future research is encouraged to explore successful examples of financial governance in conflict zones and evaluate mechanisms for sustaining financial and economic stability during prolonged crises.