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March 2024 (published: 04.03.2024)
Number 1(56)
Home > Issue > Mechanisms for limiting financing of the public sector of the economy
Ivleva E.S. , Rumyantseva A.Yu.
, Tserkasevich L.V.
The purpose of the article is to determine the most significant factors influencing the need to expand the financing of public expenditures, as well as to identify mechanisms that impede this process. The article examines the evolution of the expanding public sector financing depending problem on the growth of gross product, from the development of a scientific hypothesis by A. Wagner and its practical implementation to the denial of its significance at the present stage of economic development. The history of the emergence and practical justification of the hypothesis of the need to increase public sector financing is considered, including the concepts of the pattern of expanding public sector financing in the context of three directions - analysis of internal economic factors, study of internal political factors, the presence of external effects influencing decision-making in the distribution of the state budget. The relationship between the expansion of the public sector and economic growth is revealed, and factors limiting the increase in government spending are identified. The object of the study is the public sector, the subject of the study is the mechanisms of limiting financing of the public sector. The research methodology is based on a dialectical approach, the use of general scientific methods, and analysis of specialized literature. The fact that the state’s macroeconomic policy should be based on a clear understanding of the relationship between the financing of government expenditures and the volume of the national product, as well as their impact on economic growth, determined the relevance of this study. Based on the analysis of the factors of the relationship between the expansion of public sector financing and economic growth, the article made a number of conclusions that reveal the evolution of the problem of expanding public sector financing depending on the growth of the gross product, from the development of a scientific hypothesis by A. Wagner and its practical implementation to the denial of its significance in modern times. stage of economic development.
Read the full article
Keywords: Public sector financing, Wagner's law, Economic growth, Armey-Rahn curve, Scully point.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336.512
Mechanisms for limiting financing of the public sector of the economy
The purpose of the article is to determine the most significant factors influencing the need to expand the financing of public expenditures, as well as to identify mechanisms that impede this process. The article examines the evolution of the expanding public sector financing depending problem on the growth of gross product, from the development of a scientific hypothesis by A. Wagner and its practical implementation to the denial of its significance at the present stage of economic development. The history of the emergence and practical justification of the hypothesis of the need to increase public sector financing is considered, including the concepts of the pattern of expanding public sector financing in the context of three directions - analysis of internal economic factors, study of internal political factors, the presence of external effects influencing decision-making in the distribution of the state budget. The relationship between the expansion of the public sector and economic growth is revealed, and factors limiting the increase in government spending are identified. The object of the study is the public sector, the subject of the study is the mechanisms of limiting financing of the public sector. The research methodology is based on a dialectical approach, the use of general scientific methods, and analysis of specialized literature. The fact that the state’s macroeconomic policy should be based on a clear understanding of the relationship between the financing of government expenditures and the volume of the national product, as well as their impact on economic growth, determined the relevance of this study. Based on the analysis of the factors of the relationship between the expansion of public sector financing and economic growth, the article made a number of conclusions that reveal the evolution of the problem of expanding public sector financing depending on the growth of the gross product, from the development of a scientific hypothesis by A. Wagner and its practical implementation to the denial of its significance in modern times. stage of economic development.
Read the full article
Keywords: Public sector financing, Wagner's law, Economic growth, Armey-Rahn curve, Scully point.
DOI 10.17586/2310-1172-2024-17-1-116-124