PUBLIC PURCHASES IN STIMULATING OF THE NATIONAL ECONOMY DEVELOPMENT

Author
, Ph.D., Associate professor of the Department of Finance, Accounting and Fundamental Economic Disciplines, Kyiv, Ushynskoho 15

In heading

 Economic theory;

Signed print

 26.02.2018

Issues number

 2018 - № 1 (32)

Page

 60-71

Type of articles

 Scientific article

Code UDK

 330.073.53

ISSN print

 2411-5584

Abstract

 Problem setting. Under the current conditions of transformations one of the relevant problem becomes the rethinking of the scientific research results of the importance and role of the state’s economic policy in the system of activating the development factors of the national economy. In this case, it is relevant to use the methodology of analyzing the expansion of the tools spectrum, which involves stimulating the investment growth in the national economy, and also, promotes the production and causes development of increasing the employment level, growth of its incomes, some of which are also transformed into investment resources. That is why the increasing in public investment leads to GDP growth. Conceptualization of state influence mechanisms on the development of the national economy on the public procurement tools basis use should be based on a comprehensive analysis of factors that trigger the macroeconomic dynamics activation.
Analysis of recent research and publications. In recent years, the problems actualization of determining the state active influence directions on the macroeconomic processes course based on the public procurement instruments use is conditioned by the research scale and global nature growth. The scientific community pays special attention to the necessity to find the optimal solution of economic development problems on the basis of maximizing the potential of endogenous growth use, since such measures can contribute an effective economic policy construction. The problem of public pocurement mechanisms is analyzed in details by scientists, while there are no unambiguous approaches to finding the ways to increase the public procurement potential using efficiency in the
national economy.
Paper objective. The purpose of the article is to reveal the latest trends in forming the directions of stimulating the development of the national economy based on the use of public procurement tools.
The main material presentation. Using the macroeconomic analysis tools, it can be affirmed that an increase in public expenditures increases the GDP volume and is an aggregate demand integral part for goods and services. Moreover, the growth of public expenditures leads to a larger increase in income compared with the previous level. In this case, there is a state expenditures multiplier, which demonstrates the national product growth under the public expenditures increase influence.
The reason for the multiplier effect is that a higher level of income leads to the higher level of consumption and investment. As rising public expenditures increase income, that increases the level of consumption and investment, which, in its turn, contributes to a further incomes’ increasing, as well as the consumer and investment expenditures level increase. Therefore, the growth of public expenditures leads to an increase in revenues. It means that higher incomes earned by economic agents due to rising public expenditures lead to an increase in consumption and investments that also increase GDP. The analysis makes it possible to conclude that Ukraine needs a radical change in the public procurement system. As Ukrainian state purchases are now largely working on the development of other countries’ economies and on the households’ welfare. The industrial development stimulation through the public procurement should also be accompanied by the other state actions, including enterprises registration liberalization, tax preferences provision for industrial parks, conditions simplification for joining the engineering networks, the exportcredit agency activity beginning, trade missions network creation of Ukraine abroad etc.
Conclusions. The analysis makes it possible to conclude that the state’s active policy implementation, based on the necessity to stimulate its development through the public procurement tools use, provides for the solution of two most important strategic tasks. Firstly, it is about bringing the functions of the state in full compliance with the potential of its endogenous development, which implies the state’s ability to effectively implement the economic policies aimed at promoting national economic growth. Secondly, such a task relates to the necessity of state institutions capacity increasing, which implies an effective state action that would promote the competitive goods and services domestic production development.
Short Abstract for an article
Аbstract. In the article is defined that the development dynamics of the national economy are largely conditioned by the role of the state. The state purchases value analysis in the macroeconomic processes revitalization is carried out. The directions of overcome of negative tendencies of state purchases system development in Ukraine are determined. The perspective directions of using the world experience of national economies development stimulating based on the potential concentrated in the public procurement sphere are analyzed. The public procurement development conceptual foundations and main determinants in Ukraine have been identified.

Keywords

 state purchases, production localization, industrial policy, government expenditures, GDP growth.

Reviewer

External reviewer

Article in PDF

 1 60-71

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Code DOI

 10.31359/2411-5584-2018-32-1-60

16.02.2018