Barriers to sustainable development of municipalities with resource specialisation of the economy

Abstract

Numerous studies demonstrate that the goals of economic growth frequently take precedence over addressing social problems and problems of environmental degradation. The manifestations of this imbalance differ from country to country depending on the stage of development of the productive forces, and institutional framework that ensures the creation and adoption of new practices and approaches to exploitation of natural resources. This problem is entirely inherent into the economies of resource regions. The paper aims to examine the impact of the extraction of raw materials demanded by the national economy on the problems and prospects of the long-term sustainable development of northern Russian localities. Methodologically, the research rests on the theory of inclusive development and evolutionary economic geography. The comparative analysis of the formation of local budgets and dynamics of the Okrug in Russia reveals that the degree of their financial sufficiency depends insignificantly on the scales and dynamics of raw material production. The legislation on assigning revenues to local budgets takes into account the specifics of the northern oiland gas-producing territories rather poorly. The financial capabilities of local communities do not allow handling existing ecological problems. The growth in hydrocarbon production in current institutional conditions does not guarantee sustainable long-term development for such territories. Addressing environmental issues requires instituting serious changes at federal and regional levels, including making the alterations to the articles of the Tax Code of the Russian Federation. It is also crucially important to give financial incentives to introduce new technologies, provide research grants, lower labour taxes, and raise taxes on the use of natural resources.