№ 2018/4

The problem formulation. The article analyzes the reasons for implementation of the austerity poli-cies that arose as a response to the debt crisis in the global economy and, according to neo-liberal logic, imply the expediency of reducing the government expenditures of countries in order to con-tain the growth of state and guaranteed state debt (external and internal), balancing the state budget and, most importantly, to restore the confidence to the authority institutions from the side of population, investors and other stakeholders. The ultimate goal of austerity policies is the recov-ery/revitalization of economic growth, which is very seldom achieved in practice. It is proved that the increase in the debt burden does not depend on the growth of the social sphere, but on the sup-port of the financial sector, and the rescue of the banking system in a situation of permanent crisis. Therefore, the austerity policies are controversial and are also generated by financial markets. The article considers the role of fiscal democracy as an instrument of influence on the redistribution of state budget revenues in correlation with austerity policies.
The purpose of the article: to analyze the reasons for the implementation and trends of austerity policies, to show the limitations of such a fiscal policy; to reveal the theoretical content of fiscal de-mocracy and determine its role in the distribution of budget expenditures in austerity policies; and to define the basic principles of fiscal democracy that hold back the growth of economic inequality in the countries. Methodological approaches: political and economic analysis, economic and statistical method; and logical method.
Conclusions. On the analysis of the Public Debt to GDP dynamics indicator in developed countries, it is determined that its normative value in 60% developed countries is not observed, even under austerity policies. The analysis has made it possible to draw conclusions about the directions of improving the public financial management of a country based on the principles of fiscal democracy, such as the principles of justice, equality, transparency, priority, and time and financial symmetry in the redistribution of state budget revenues, taking into account the operational and strategic needs and interests of the population. It is shown that, in developed countries, the fiscal democracy index approaches zero, which is a result of the dependence of the country's economy on external and internal debt: mandatory expenditures, including "soft investments", are financed by debts. A similar tendency is observed in Ukraine. It is substantiated that austerity policies as the tools of public fi-nancial management lead to opposite results in countries with different levels of economic devel-opment, and therefore they should be implemented taking into consideration the national specificity, economic structure and efficiency, as well as social consequences, in order to exclude their exces-sively negative extreme forms.

Keywords:fiscal democracy, austerity policies, economic growth, government debt