DEVELOPMENT OF HUMAN CAPITAL IN UKRAINE THROUGH EXPANDED PUBLIC FINANCES

Abstract

The article presents the results of the study of opportunities for human capital development through the use of financial levers by the state authorities. The effectiveness of budget policy for financing health care and education as key industries being instrumental in the creation of human capital necessary for reforms and innovative economic development is analyzed. The gap in budget funding for education and medicine in Ukraine is shown, which is visibly lower not only in comparison with world practice but also the norms established by national legislation. The measures to increase the efficiency of the state’s efforts to develop human capital are proposed, in particular, an increase in budget resources used for these goals by providing a high level of functionality of public finances. To achieve those tasks it is necessary to improve the public budget policy, meaning to improve budget planning and forecasting for financial resources for the education and healthcare sector; to strengthen the institutional capacity and effectiveness of regulatory frameworks; to expand interactions and coordination of institutions managing public finances and local self-government bodies to strengthen the health and education systems; to ensure transparency and effective supervision of assigned resources and their effective use. In particular, it has been shown that additional budget funds for socio-economic development may be freed by decreasing debt load and reducing the cost of servicing public debt, balancing the budget of the Pension Fund, increasing efficiency of cooperation with IFOs.