The subject of the research is the theoretical principles and mechanisms of budget policy in the institutional transformations. Relevance of the research topic. Budget policy should be mutually consistent with the strategic goals of economic transformations, aimed at creating appropriate conditions for deepening the interaction between the state and society, improving the level and quality of citizen’s life. The purpose of the study is to deliver the economic essence of budget policy and justify its strategic objectives in the institutional transformations. Research methods. There is a set of scientific research methods in the research: a systematic approach, statistical analysis, structuring, analysis, synthesis, etc. Results of the research. The theoretical basis of the formation and implementation of budget policy in the institutional transformations disclosed in the paper. The authors substantiated the strategic priorities of the budget policy in emerging countries. Area of application of results. The research results can be used in the formation and implementation of the budget policy of Ukraine, reforming the public finance system. Conclusions. The effectiveness of budget policy depends not only on the quality of its development but on its implementation mechanisms as well. At this stage, important tasks are coordination of budget expenditures with the priorities of socio–economic development of countries and the distribution of budget funds not by expenditures type but by strategic goals. Urgent measures are: strengthening the coordination of public authorities in the formation and implementation of financial policy components; budget, debt, and monetary policy coordination. In addition to estimates of financial and economic factors, it is important to take into account political factors in the development of budget policy. They are an essential prerequisite vectors of the budget system.