Proceedings of the International scientific and practical conference ―Research Horizons in the Modern World‖ (March 27-29, 2026) / Publisher website: www.naukainfo.com. – Warsaw, Poland, 2026. - 135 p.

130 MANAGEMENT, PUBLIC GOVERNANCE AND ADMINISTRATION UDC 35:004:330.34 Sikalo Maksym PhD in Public Management and Administration doctoral candidate Institute of Public Administration V. N. Karazin Kharkiv National University Kharkiv, Ukraine ARTIFICIAL INTELLIGENCE AND THE FUTURE OF PUBLIC SECTOR ECONOMICS: NEW HORIZONS OF VALUE CREATION Abstract . The article examines the economic effects of artificial intelligence implementation in the public sector as a systemic transformation of public value creation mechanisms. It is demonstrated that key effects manifest through changes in cost structures, increased productivity, improved service quality, and enhanced policy effectiveness, contingent upon the presence of complementary institutional and technological factors. It is substantiated that the economic efficiency of AI is determined by the level of digital maturity of the state, data quality, and the capacity for institutional adaptation, whereas the absence of these conditions constrains the scalability of effects. Keywords: artificial intelligence, public administration, digital transformation, economic effects, productivity, govtech, transaction costs