Federal intergovernmental transfers in the Russian Federation: experience and results of implementation
Abstract
Relevance. Intergovernmental budgetary regulation is pivotal for promoting territorial equalization and bridging socio-economic gaps among regions. It ensures equitable access to public goods for all citizens, irrespective of their location. The effective distribution of federal financial assistance, guided by the principles of budget federalism, is essential for maintaining macroeconomic stability and fostering sustainable socio-economic development on the national and regional levels.
Research Objective. The study aims to assess the competitive positions of Russian regions within the distribution system of federal intergovernmental transfers.
Method and Data. To investigate Russia’s system of intergovernmental transfers, the research employs statistical methods, including structural-dynamic, grouping, and graphical analysis, along with novel analytical tools like the dependence coefficient and income coefficient. The study encompasses data from 2015 to 2022, sourced from the Federal Treasury and Federal State Statistics Service (Rosstat).
Results. The study analyzes the dynamics of transfers from the federal budget to regional budgets and shows significant transformations in the transfer structure, revealing a decrease in non-targeted transfers and an increase in targeted ones. The study also examines the differences between regions in the distribution of these transfers. Russian regions were grouped depending on the share of federal transfers in their total budget income and the average per capita income in their consolidated budget. The study introduces a novel methodological approach through the use of newly developed tools—the dependence coefficient and income coefficient—to evaluate regional competitiveness.
Conclusion. Despite an overall increase in federal transfers, persistent regional disparities intensify competition for financial assistance. These findings can be of interest to policymakers at federal and regional levels, researchers, and educators in relevant fields.
Keywords
Full Text:
PDFReferences
Abbott, A., Cabral, R., & Jones, P. (2017). Incumbency and distributive politics: Intergovernmental transfers in Mexico. Southern Economic Journal, 84(2), 484-503. https://doi.org/10.1002/soej.12226
Aji, P., Wibisono, I. D., & Suryahadi, A. (2021). Regional income convergence and inequality in decentralized Indonesia. Journal of Southeast Asian Economies, 38(3), 356-374. https://doi.org/10.1355/ae38-3e
Akhmetzhanova, L. R. (2022). Teoreticheskie podkhody k effektivnosti mezhbyudzhetnyh transfertov na regional'nom urovne [Theoretical approaches to the effectiveness of interbudgetary transfers at the regional level]. Ekonomicheskaya bezopasnost, 5(1), 61-76. https://doi.org/10.18334/ecsec.5.1.114355 (in Rus)
Alm, J., & Boex, J. (2008). The role of economic versus political factors in the incidence of intergovernmental transfers in Nigeria. The Journal of Developing Areas, 42(1), 1-19.
Amri, P. D., & Amri, M. (2021). Decentralization and regional competitiveness in Indonesia. Journal of Southeast Asian Economies, 38(3), 297-319. https://doi.org/10.1355/ae38-3b
Béland, D., Lecours, A., Paquet, M., & Tombe, T. (2020). A critical juncture in fiscal federalism? Canada's response to COVID-19. Canadian Journal of Political Science/Revue canadienne de science politique, 53(2), 239-243. https://doi.org/10.1017/S0008423920000323
Brollo, F., Nannicini, T., Perotti, R., & Tabellini, G. (2013). The political resource curse. American Economic Review, 103(5), 1759-1796. https://doi.org/10.1257/aer.103.5.1759
Deryugin, A. N. (2023). Regional'nye byudzhety v 2022 g. [Regional budgets in 2022]. Ekonomicheskoe razvitie Rossii, (4), 61-65. (in Rus)
Dharmawan, G., & Suryadarma, D. (2021). Measuring regional education performance in decentralized Indonesia. Journal of Southeast Asian Economies, 38(3), 375-395. https://doi.org/10.1355/ae38-3f
Drew, J., & Dollery, B. (2020). The economics and politics of financial unsustainability in local government. Public Administration Quarterly, 44(2), 160-171. https://doi.org/10.37808/paq.44.2.1
Duan, H., & Zhan, J. V. (2011). Fiscal transfer and local public expenditure in China: A case study of Shanxi Province. China Review, 11(1), 57-88.
Edelenbos, J., van Meerkerk, I., & Schenk, T. (2018). The evolution of community self-organization in interaction with government institutions: Cross-case insights from three countries. American Review of Public Administration, 48(1), 52-66. https://doi.org/10.1177/0275074016651142
Espino, E. (2005). Should intergovernmental transfers provide insurance to the states? Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift Für Die Gesamte Staatswissenschaft, 161(1), 103-125.
Fidelman, P. I. J., Leitch, A. M., & Nelson, D. R. (2013). Unpacking multilevel adaptation to climate change in the Great Barrier Reef, Australia. Global Environmental Change, 23(3), 800-812. https://doi.org/10.1016/j.gloenvcha.2013.02.016
Gonschorek, G. J., & Schulze, G. G. (2018). Continuity or change?: Indonesia's intergovernmental fiscal transfer system under Jokowi. Journal of Southeast Asian Economies, 35(2), 143-164. https://doi.org/10.1355/ae35-2c
Gordin, J. P. (2006). The politics of intergovernmental fiscal relations in Argentina. IBEI Working Papers, 2006/2.
Higashikata, T. (2021). The impact of minimum wage increases on employment in Indonesia: Plant-level evidence from West Java. Journal of Southeast Asian Economies, 38(3), 336-355. https://doi.org/10.1355/ae38-3d
Hou, Y. (2011). Establishing a new intergovernmental fiscal transfer system in China: The state of the field, 1994-2010. China Review, 11(2), 213-243.
Kachanova, O.A., & Korotina, N.Yu. (2018). Methodological aspects of assessing the Russian model of budget federalism from the viewpoint of asymmetric economic criteria. Socium i vlast’, 5(73), 71-81. (in Rus).
Khawaja, I., & ud Din, M. (2013). Intergovernmental transfers: An evaluation of mechanism and design of transfers in Pakistan. The Pakistan Development Review, 52(1), 45-68.
Klimanov, V. V., & Mikhaylova, A. A. (2021). Fiscal decentralization in pandemic and post-pandemic times. Journal of the New Economic Association. 51 (3), 218-226. https://doi.org/10.31737/2221-2264-2021-51-3-11 (in Rus)
Lavrovsky B.L., & Goryushkina E.A. (2021). Fiscal federalism in Russia: To be or not to be? Voprosy Ekonomiki, 1, 143–160. DOI: 10.32609/0042-8736-2021-1-143-160 (in Russian).
Litschig, S., & Morrison, K. M. (2013). The impact of intergovernmental transfers on education outcomes and poverty reduction. American Economic Journal: Applied Economics, 5(4), 206-240. https://doi.org/10.1257/app.5.4.206
Litvack, J. I., Ahmad, J., & Bird, R. M. (1998). Rethinking decentralization in developing countries. World Bank Publications. Retrieved from https://openknowledge.worldbank.org/handle/10986/11307
Long, C., Fraser, A., Mbate, M., & Lacroix, A. (2021). Reforms to improve the equity of intergovernmental transfers. In Intergovernmental fiscal transfers, equity and service delivery: Lessons from Uganda (pp. 45-54).
Mikhailova A., Klimanov V., & Safina A. (2018). Influence of inter-budgetary transfers on economic growth and the structure of the regional economy. Voprosy Ekonomiki, 1, 91–103. DOI: 10.32609/0042-8736-2018-1-91-103 (in Rus).
Negara, S. D., & Hutchinson, F. E. (2021). Introduction: The impact of Indonesia's decentralization reforms two decades on. Journal of Southeast Asian Economies, 38(3), 289-295. https://doi.org/10.1355/ae38-3a
Palkina, D. S., & Bogomolova, A. A. (2023). Osnovnye tendencii razvitiya mestnyh byudzhetov (na primere municipal'nyh rajonov Vologodskoj oblasti) [The main trends in the development of local budgets (the example of municipal districts in the Vologda region)]. Nauchnyj rezul'tat. Ekonomicheskie issledovaniya, 9(1), 130-141. https://doi.org/10.18413/2409-1634-2023-9-1-1-1 (in Rus)
Prud'homme, R. (1995). The dangers of decentralization. The World Bank Research Observer, 10(2), 201-220. https://doi.org/10.1093/wbro/10.2.201
Rodrik, D., Subramanian, A., & Trebbi, F. (2004). Institutions rule: The primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2), 131-165. https://doi.org/10.1023/B:JOEG.0000031425.72248.85
Saito-Jensen, M. (2015). Theories and methods for the study of multilevel environmental governance. Guideline. Bogor, Indonesia: CIFOR. https://doi.org/10.17528/cifor/005541
Shah, A. (1998). Fiscal federalism and macroeconomic governance: For better or for worse? Retrieved from http://documents.worldbank.org/curated/en/868521468766267438/Fiscal-federalism-and-macroeconomic-governance-for-better-or-for-worse
Takahata, J., Dartanto, T., & Khoirunurrofik, K. (2021). Intergovernmental transfers in Indonesia: The risk sharing effect of Dana Alokasi Umum. Journal of Southeast Asian Economies, 38(1), 81-99. https://doi.org/10.1355/ae38-1d
Tanzi, V. (2001). Pitfalls on the road to fiscal decentralization. Carnegie Endowment for International Peace. Retrieved from https://carnegieendowment.org/files/Tanzi.pdf
Ulumbekova, G. E. (2022). Analiz raskhodov byudzhetnoj sistemy Rossijskoj Federacii (FFOMS, federal'nogo i regional'nyh byudzhetov) po razdelu «Zdravookhranenie» na 2023 g. i na planovyj period 2024 i 2025 gg. [Analysis of expenditures of the Russian Federation's budgetary system (Federal Compulsory Medical Insurance Fund, federal and regional budgets) under the section "Healthcare Service" for 2023 and for the planned period of 2024 and 2025]. ORGZDRAV: Novosti, mneniya, obuchenie. Vestnik VSHOUZ, 8(3), 4-9. https://doi.org/10.33029/2411-8621-2022-8-3-4-9 (in Russian)
Veiga, L. G., & Veiga, F. J. (2013). Intergovernmental fiscal transfers as pork barrel. Public Choice, 155(3-4), 335-353. https://doi.org/10.1007/s11127-011-9863-2
Vidyattama, Y. (2021). Decentralization and fiscal autonomy at the subnational level in Indonesia. Journal of Southeast Asian Economies, 38(3), 320-335. https://doi.org/10.1355/ae38-3c
Weingast, B. R. (1995). The economic role of political institutions: Market-preserving federalism and economic development. Journal of Law, Economics & Organization, 11(1), 1-31. https://doi.org/10.1093/oxfordjournals.jleo.a036861
Zubarevich, N.V. (2021). Possibility of decentralisation during the year of pandemic: what does the analysis of public budgets reveal? Regional Studies, 1, 46-57. https://doi.org/10.5922/1994-5280-2021-1-4 (in Rus)
DOI: https://doi.org/10.15826/recon.2024.10.2.011
Copyright (c) 2024 Alexander A. Pobedin
Сertificate of registration media Эл № ФС77-80764 от 28.04.2021
Online ISSN 2412-0731