Compilation of regional financial balances for the ‘General Governance’ sector in the Ural Federal District

Alexey F Pasynkov

doi:10.15826/recon.2020.6.4.022

Abstract

Relevance. In recent years, the significance of financial flows in the public sector in territorial development in Russia has been growing. To be able to analyze all public sector revenues and expenditures at the regional level, it is necessary to develop financial balances that take into account all flows of financial resources. Research objective. The purpose of this study is to create financial balances of the "General Governance" sector by using the example of six regions in the Ural Federal District. Data and methods. The study is based on the theoretical framework of the System of National Accounts. The author proposes a methodological approach to the consolidation of official statistical reports from open sources in accordance with the classification of government revenues and expenditures in national accounting. Results. The proposed methodology for calculating the income and expenditures of all budgets in the region, including the volume of direct federal expenditures, is based on comparing the data on the sources of added value formation. A database on income and expenditures of the regions of the Ural Federal District for the period 2014-2018 was made and a matrix of financial balances of the "General Governance" sector by regions for 2017 was built. To this end, the structure and amount of public institutions financing costs were specified and donor and recipient regions of the Ural Federal District were identified. Conclusions. Financial resources of the public sector affect the economy of the regions of the Ural Federal District in several ways. The regions specializing on oil and gas production are net donors to the sector, the rest of the regions cannot provide for themselves and are more dependent on federal funds. The sector "General Governance" generates more than 10% of GRP of Chelyabinsk and Sverdlovsk regions and more than 20% of Kurgan region. The results can be used for planning and forecasting of socio-economic development of certain areas.

Highlights

Socio-economic development of territories at various levels depends on many different factors that influence the level and dynamics of reproduction processes
Since this study aims to describe the financial flows of the public sector, first of all, it is necessary to bring the available statistical data into a form comparable to the System of National Accounts (SNA)’s methodology
The study on the development of financial balances of the Ural Federal District led us to the following basic conclusions: 1. The development of the account ‘General Governance’ at the regional level allows us to more accurately determine the directions of transfer and spending of funds on all levels in the territory

Summary

Introduction

Socio-economic development of territories at various levels depends on many different factors that influence the level and dynamics of reproduction processes. The expenditures of households and budgets of all levels provide the demand for goods in the production sector, ensuring the circulation of financial flows in regions. A general trend for Russia and the world in general has been the increasing importance of financial flows in the public sector for the development of territories. The importance of the general government sector in the circulation of financial flows lies in the redistribution of added value between economic units and territories, which allows to solve certain problems, including the equalization of conditions for socio-economic development. For various territories, financial flows of the public sector are of different importance, both in the structure of value added and in the ratio of revenues and expenditures of the general government sector

Objectives

Methods

Results

Conclusion