ECONOMIC MECHANISMS OF PUBLIC ADMINISTRATION OF UKRAINE'S CULTURAL SPHERE: CHALLENGES AND TOOLS FOR CALCULATING TARGETED FUNDING

Abstract

Introduction. The article examines the financial and economic instruments of public administration in the cultural sphere of Ukraine and finds that they have long remained outdated and insufficiently effective, leading to systemic underfunding of the sector, degradation of cultural infrastructure, and an outflow of qualified personnel. The relevance of the topic is heightened by the adoption of the Culture Development Strategy until 2030 and a number of legislative initiatives planned for 2025–2026 aimed at reforming the financial support system.

Purpose. The purpose of the article is to analyse contemporary challenges in the functioning of financial and economic mechanisms of public administration in the cultural sphere and to develop a toolkit for targeted multichannel financing.

Materials and methods. The source base of the research includes regulatory legal acts of Ukraine (the Budget Code, draft laws No. 14276 and No. 1234, the Culture Development Strategy until 2030), statistical data from the State Treasury Service, analytical materials of the Ukrainian Cultural Foundation and the EU programme Creative Europe, as well as scholarly works of domestic and foreign experts. The methodological framework is based on system analysis, synthesis, comparative analysis, statistical and logical generalisation.

Results. Key problems have been identified: systemic funding deficit (the share of consolidated budget expenditures does not exceed 1.5–2 %), the dominance of line-item maintenance of institutions over direct financing of cultural services, ineffectiveness of the programme-targeted approach, low level of patronage and public-private partnerships, and significant territorial disparities. A comprehensive toolkit for targeted multichannel financing is proposed, including: a formula for calculating the total amount of funding, a step-by-step algorithm for fund distribution at the community/regional level, a system of six key performance indicators (KPIs) for monitoring effectiveness, and a conditional calculation example for a rural community.

Prospects. Further scholarly research should focus on developing a methodology for calculating the cost of basic cultural services and the norms HiHi​, analysing the effectiveness of the compensation mechanism for patrons (Draft Law No. 14276), adapting European models of public-private partnerships, exploring the possibilities of introducing cultural vouchers, and forming an integrated KPI system for budget programmes.