№ 8/2019

Fìnansi Ukr. 2019 (8): 26–44https://doi.org/10.33763/finukr2019.08.026

THEORY AND HISTORY OF FINANCES

LUNINA Inna ¹, BONDARUK Taisiia ²

¹Institute for Economics and Forecasting of NAS of Ukraine
OrcID ID : https://orcid.org/0000-0003-3812-4802
²SE “Institute for Economics and Forecasting of NAS of Ukraine”
OrcID ID : https://orcid.org/0000-0001-9410-6428

The development of theory and scientific concept of public finance

The term "public finance" has become widely used in modern economic and financial literature in Ukraine. Fiscal decentralization and the increase of public concern towards government activities have greatly intensified the discussion of public finance issues. This article stresses that the interpretation of the concept of "public finances" is based mainly on the characteristics of its constituents, the criteria of ownership and publicity, transparency of the financial activities of various public unions. At the same time, the fundamental differences between the activities of government authorities and economic entities (state or municipal enterprises) remain unaddressed. It is proved that the definition of this concept should take into account the features of public and private finances, which imply different purposes of activities of government authorities and economic entities, as well as different sources of their income. The purpose of state economy is to serve the accomplishment of public goals, whereas the purpose of private economy is to gain profit on the basis of mutual exchange of services. Inclusion in the public finance of state or municipal enterprises is called in question due to the fact the activity of economic entities does not serve the realization of public functions and means the production of goods and services on the market basis, whereas the activity of state governments is aimed at providing the society with goods and services on the non-market basis at the cost of taxes and other compulsory payments. It is concluded that the financial activities of political parties and non-governmental organizations cannot be included in public finance since the latter is designed to finance the performance of the general government functions rather than the activities of voluntary associations. It is proved that the key feature of public finance is the financial provision of government functions (in the broad sense).

Keywords:public finance, government functions, private finance, state economy, financial provision of the government functions

JEL: Н00, Н10

Lunina I. . The development of theory and scientific concept of public finance / I. . Lunina, T. . BONDARUK // Фінанси України. - 2019. - № 8. - C. 26-44.

Article original in Ukrainian (pp. 26 - 44)

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