ADMINISTRATION OF INNOVATIVE FINANCING OF SOCIAL PROTECTION

Abstract

The article develops conceptual and applied foundations for administration of innovative financing of social protection. Financial innovation is interpreted not as the mechanical use of a new source of money, but as a governed change in the way public value is financed, risks are allocated, providers are contracted, outcomes are verified and citizens’ rights are protected. The study combines institutional, process, portfolio, risk-oriented and public-value approaches. A classification of innovative instruments is proposed, covering results-based financing, social impact contracts, blended finance, socially responsible public procurement, personal budgets and vouchers, revolving and guarantee facilities, and matched co-financing. It is substantiated that each instrument has a limited field of appropriate application and must pass tests of legal admissibility, additionality, fiscal affordability, ethical acceptability, data readiness, market capacity and scalability. The author proposes a seven-stage stagegate management cycle: problem and rights screening; additionality and fiscal-risk assessment; selection of an instrument and allocation of risks; competitive contracting; delivery and real-time monitoring; independent verification and payment; and a decision on scaling, redesign or termination. An integral readiness index is introduced, combining legal, data, administrative, measurement, provider-market and safeguard components. Particular attention is paid to the prevention of mission drift, cream-skimming, gaming of indicators, contingent fiscal liabilities, excessive transaction costs, concentration of providers, digital exclusion and misuse of personal data. A differentiated governance architecture is developed for central executive authorities, the Ministry of Finance, regional and local authorities, service providers, investors, philanthropic organisations, independent verifiers and service recipients. The proposed model requires a public register of pilots, standard contractual clauses, proportional impact measurement, open aggregated performance data, clear ownership of algorithms and datasets, and an exit plan before implementation begins. The practical recommendations envisage portfoliobased piloting in different types of communities, protected baseline financing for essential guarantees, small outcome-dependent payment shares at the initial stage, and gradual scaling only after evidence of additional public value and fiscal sustainability. The scientific novelty lies in integrating instrument choice, stage-gate governance, data management, risk allocation, human-rights safeguards and scaling decisions into a unified public administration mechanism for innovative financing of social protection in Ukraine.