Transformation Of The Financial Mechanism Of Public Procurement In The Digital Paradigm Of Programmed Public Demand

Abstract

Abstract. The article provides a comprehensive theoretical substantiation and develops applied frameworks for the transformation of the public procurement financial mechanism within the global digitalization context and the transition to the GovTech 3.0 concept. The study analyzes the genesis of scientific approaches to defining the «financial mechanism»: from classical state-centric models by A. Wagner and R. Musgrave’s functional triad to the modern institutional-digital ecosystem. The author argues that in the digital paradigm, the financial mechanism loses its purely instrumental role and transforms into a subjective environment for shaping economic reality. The transition to the «programmed public demand» concept is substantiated, where public procurement serves not merely as an instrument for the utilization of budget appropriations but as a fundamental determinant of economic dynamics and endogenous growth. The work employs a synthesis of methods: neo-institutional analysis to redefine procurement as a financial institution; the method of paradigmatic inversion to change the vector of budget flow determination; and a system-structural approach to isolate five subsystems of the modern mechanism (financial methods, instruments, levers, institutional support, and the algorithmic component). For the first time, the concept of «algorithmic determinism» is scientifically grounded, involving the integration of legal norms directly into software code through smart contracts and data interoperability architecture based on X-Road/Trembita systems. The shift from the linear logic of the budget process to a cyclical model of self-executing obligations is described, where embedded compliance control eliminates the time lag between transaction execution and financial audit. The role of Explainable AI (XAI) is defined as a primary driving force for ensuring budgetary security and implementing the «human-in-the-loop» principle over algorithmized financial decisions. The practical significance of the results lies in the possibility of adapting Ukraine's financial system to the requirements of the EU Enlargement Policy and OECD standards through the implementation of a public value tokenization model, which significantly enhances financial resilience in poly-crisis environments.