The increasing number of internally displaced persons (IDPs) in wartime Ukraine leads to growing problems in social protection funding. Under these circumstances, the evaluation of the effectiveness of public finance use is of increasing importance. The study aims to evaluate the effectiveness of public finance for internally displaced persons’ social protection, adapting the KPI methodology for analysis on the national level. The effectiveness is considered following the OECD approach as the extent to which the intervention achieved its objectives and results. At macrolevel of research, the integral indicator was developed based on indicators of input (financing of social protection programs), output (involvement of IDPs in social programs), activity (funding per recipient and multiplicative effect in GDP growth), mechanism (administrative costs for achieving results), and control (effectiveness of IDPs’ social protection compared to other demographic groups). Thirty indicators in total were used (e.g., budgetary funding allocated for housing assistance; budget expenditures on staff salaries of the authorities responsible for certain programs; coverage rate of unemployed IDPs receiving vocational training). The essential distance from the maximum level of expected results (1.0) allows concluding the low effectiveness in this area of public finance use: from 0.330 in 2020 to 0.668 in 2023. Gaps are evident in each direction, especially in input performance (the highest value did not exceed 0.370). The best results were achieved in housing funding and employment governance. The proposed approach is useful for analyzing gaps and identifying opportunities to improve the management of other social programs.

The main aim of the study is to test the hypothesis that social expenditures are not only a source of social support and budgeting of the social sphere, but can be a significant lever of economic development, provided proper planning of their share and volume. In this regard, the authors have adapted the open-economy multiplier to assess the economic effect of social expenditures. Based on the correlation analysis of the relationship between the share of social expenditures (% of GDP) and the multiplier of social expenditures, conducted on the example of EU countries, two groups of countries are identified depending on the impact of social expenditure multiplier on GDP: the first one embraces those countries that are characterized by a growing economic return from social expenditures; the second one is where the return is declining. To determine the optimal levels of social expenditures, which can be expected to have a positive economic effect in the form of GDP growth, we have identified critical limits of the multiplier of social expenditures according to the principle: the maximum value is seen in the group of countries with positive impact; the minimal one is experienced in countries with inverse dependence of the share of social expenditures and their multiplier. As a result, the experience of financing social expenditures in the EU leads to the conclusion that the optimal share of social expenditures in GDP ranges from 28% to 30% – within these limits multiplier values exceed 1.0, i.e. there is a positive impact of social expenditures on GDP in the form of the growth of economic results over the resources consumed.