Introduction. The study of the functioning of budgetary institutions as producers of public goods and services requires an interdisciplinary view using institutional and transactional analysis, the achievements of the theory of public finance, budget accounting and public administration.
Methods. The following methods are used in the article: scientific abstraction in highlighting the essential features of budgetary institutions; comparative analysis, in distinguishing between transaction and transformation costs; systematic approach in explaining the financial, institutional, accounting and management aspects of the functioning of budgetary institutions in the process of public production.
Results. Emphasis is placed on the need for conceptual delimitation of budgetary institutions on the basis of their participation in public production into those that directly supply goods and services to the population and those that ensure the functioning of budgetary institutions of the first type. The paper considers the main directions of transactions of budgetary institutions, paying attention to informal transactions and the costs they may cause. It is noted that the total cost of publicly produced products includes both the transformation costs of the budgetary institution - the manufacturer, and transaction costs, which were carried out in stages to the immediate phase of production of goods by budgetary organizations. These are the costs at the stage of public choice (elections, parliamentary activities) and at the stage of its further implementation (functioning of the fiscal entities, treasury system, government borrowing, public procurement, which are transaction costs for budget organizations of the first group).
Discussion. According to the author, financial management in the budget sphere should be aimed at assessing and improving the efficiency of public production. This view should be developed in domestic textbooks and academic disciplines. After all, today they are limited to describing the current procedures for planning and implementing estimates, budget funding, without analysing its role in creating value and usefulness for citizens.
Keywords: public production, public goods, budgetary institutions, institutional environment, transaction costs, transformation costs, informal transactions.
PUBLIC PRODUCTION AND INSTITUTIONAL MECHANISM OF FUNCTIONING OF BUDGETARY INSTITUTIONS
