INSTITUTIONAL IMPACT OF THE STATE ON THE EFFICIENCY OF THE BUDGETING MECHANISM FUNCTIONING OF UKRAINIAN GOVERNMENT AUTHORITIES: THEORETICAL ASPECTS AND PRACTICAL APPROACHES

Abstract

This article explores the institutional influence of the state on the efficiency of the budgeting mechanism for public authorities in Ukraine, emphasizing both theoretical foundations and practical approaches. The relevance of the study is determined by the critical role of the budgeting mechanism in ensuring economic stability, equitable resource distribution, and alignment with strategic state objectives, particularly under the pressures of wartime conditions, economic instability, and the demand for compliance with international standards. The research aims to analyze the institutional factors shaping the functionality of the budgeting mechanism, identify its systemic inefficiencies, and propose actionable recommendations for its optimization. The methodology combines theoretical analysis, comparative evaluation, and practical case studies. The study assesses regulatory frameworks, examines the prevalence of corruption risks, and analyzes the impact of political interference on budgetary decision-making. Special focus is placed on studying international best practices, including program-based budgeting, multi-year financial planning, and the integration of digital technologies, as effective tools to enhance the transparency, accountability, and efficiency of public finance management. This methodological framework provides a comprehensive approach to identifying and addressing the challenges affecting Ukraine's budgeting system. The findings underscore significant inefficiencies in the current budgeting mechanism, including regulatory instability, lack of transparency in financial decision-making, and the persistence of discriminatory budgetary practices. For instance, the disproportionate application of subsistence minimums for salary calculations in specific public sectors, such as the prosecution service, illustrates deeper institutional deficiencies in fairness and compliance with national and international legal standards. These shortcomings erode public trust, reduce institutional efficiency, and weaken the strategic alignment of budgetary policies with national development goals. To address these challenges, the article proposes several practical recommendations. These include harmonizing regulatory frameworks with international standards, establishing independent auditing mechanisms, and enhancing the autonomy of local budgets to mitigate political interference. The integration of digital technologies for monitoring and evaluation, along with program-based budgeting approaches, is highlighted as a critical pathway for improving the effectiveness of resource allocation and ensuring accountability in budget implementation. The practical value of this article lies in its potential to guide policymakers and practitioners in public finance management by providing well-grounded insights into improving the design and operation of Ukraine's budgeting mechanism. The proposed reforms aim to foster greater financial resilience, institutional trust, and social equity while ensuring a transparent and efficient use of public resources aligned with international best practices.