PUBLIC SPENDING AND SUSTAINABLE ECONOMIC GROWTH IN TIMES OF CRISIS: EMPIRICAL TESTING OF DEVELOPED COUNTRIES

Improving planning and increasing the efficiency of public expenditures, as well as determining their optimal structure, are crucial tasks for a country's development. However, these tasks become significantly more complex under conditions of uncertainty and are particularly relevant during economic crises. This study examines the characteristics and trends of the impact of public spending on economic growth during crisis periods in developed countries. A systematic methodological approach is applied in combination with statistical research methods. Several authorial hypotheses have been confirmed: according to Wagner's law, an increase in public expenditures should be accompanied by GDP growth; the socio-economic development of a country is determined not only by the volume but also by the efficiency of public financial resource utilization (in line with Keynes' hypothesis); the level of GDP redistribution through the state budget is sensitive to crises; local budgets are less affected by financial and economic crises; and in the face of external threats, especially when a country is involved in a military conflict, the role of the state increases. The study results provide several managerial recommendations aimed at improving the public investment system for local development.