Improving public financial management in Ukraine under martial law

Abstract

The relevance of this study is determined by the need to ensure Ukraine’s financial resilience under martial law, when the public finance system operates under unprecedented budgetary, economic, and institutional challenges. The full-scale war has led to a substantial increase in public expenditures, budget deficits, public debt, and dependence on international financial assistance, highlighting the need for new approaches to public financial management. The purpose of this study is to substantiate comprehensive directions for improving public financial management in Ukraine under martial law based on an analysis of current challenges, international experience, and ongoing public sector reforms. The research employs a combination of general scientific methods, including systemic, structural-functional, comparative, analytical, and logical approaches, which made it possible to assess the current state of the public finance system, identify its key development challenges, and formulate practical recommendations for addressing them. The analysis covers the regulatory framework, official materials of the Ministry of Finance of Ukraine, reports of international financial institutions, and recent scholarly studies in the field of public finance. The findings propose a comprehensive three-level framework for improving public financial management, encompassing strategic, operational, and institutional levels. At the strategic level, the study substantiates the need to improve the regulatory framework, ensure macroeconomic stability, strengthen public debt management, restore economic infrastructure, and optimize sources of financing the budget deficit. At the operational level, the priority areas include strengthening the state's fiscal capacity, improving tax administration, developing medium-term budget planning, implementing a modern Public Investment Management (PIM) system, and increasing the efficiency of public expenditures. At the institutional level, the study emphasizes the digitalization of the budget process, the further development of the E-data information and analytical system, the integration of digital analytical tools, the enhancement of cybersecurity, the strengthening of fiscal decentralization, and the improvement of mechanisms for international cooperation. The study concludes that effective public financial management under martial law should be based on a combination of strategic planning, digital transformation, enhanced transparency in the use of public resources, strengthened institutional capacity of public authorities, and sustained trust among international partners. The implementation of the proposed measures will contribute to strengthening the state's financial resilience, improving the efficiency of public spending, maintaining macro-financial stability, and creating the necessary preconditions for Ukraine’s post-war recovery.