Improving of budget expenditures management effectiveness: problems and pragmatics

Abstract

The article analyzes the various approaches to the interpretation of «management effectiveness» concept. It was clarified that the budget expenditures management effectiveness can be evaluated by comparing the effects of using partially withdrawn monetary resources from the economy private sector in favor of the public sector, taking into account that the withdrawn resource should bring greater benefits for society than to the private entity. It is established that the inefficient use of budgetary resources is a consequence of cause’s manifestation, which are determined by the management peculiarities in the public sector of economy. It is substantiated that the dependence of directions choice, volume and budget expenditures structure depends on political decisions. As a result, a conflict of interest arises between the representative and executive branches of government. For evaluation of budget expenditure management effectiveness must take into account the costs and benefits over time. It is substantiated that the lack of incentives for production technology improving and public services provision reduces their quality. It was determined that the existing system of remuneration in the public sector cannot be a priori a stimulant for budget funds managers and budget program implementers. It is proved that an information asymmetry makes it impossible an evaluating of activity effectiveness of budgetary funds management entities and does not allow for activity results monitoring. The current trends in budget programs optimizing in Ukraine are analyzed and the reasons for changes are justified. Recommendations on the incentive tools implementation, which can have a positive influence on stakeholders and thereby increase the effectiveness of budget expenditures management, are formulated.