Financial and Structural Prospects of Local Government Reform in Russia

Abstract

The reform of local self-government (LSG), which started over 30 years ago, has not been completed at the moment, and the regulatory and legislative activities of Russian deputies to bring legislation into line with the new version of the country's Constitution are in progress. From the point of view of the impact on the state of local self-government, it is important to consider the impact of constitutional amendments regarding the exclusion of the mandatory settlement basis of the organization of local self-government on the prospective structure of the LSG; and also to assess the potential financial implications for municipal budgets and local self-government in general of the idea of embedding local self-government at the third level in the system of public authority. It is shown that the issue of the structure of the LSG and the economic feasibility of the consolidation of municipalities remains poorly developed. The paradox is that the need to assess the progress and results of the merger of municipalities not only with qualitative arguments, but also with quantitative calculations, is generally recognized, but there is currently no quantitative assessment of the effectiveness of the merger of municipalities in Russia, as in most foreign countries. The analysis of the reform transformations of the LSG and the improvement of regulatory and legislative acts regarding the regulation of the LSG of Russia has shown that local self-government, formally remaining an institution of public authority, in practice turns into “public administration within municipal borders”, known since Soviet times. The situation is complicated by the denunciation of the European Charter of Local Self-Government, implemented by the State Duma on the proposal of President Vladimir Putin in February 2023. The scientific novelty of the work consists in substantiating theoretical and practice-oriented proposals for improving the structural and financial components of the reform.