Fiscal Federalism in Russia through the Lens of Government Programs Implementation

Abstract

During the last 20 years, many attempts have been made in Russia to develop fiscal federalism system that can enable sustainable fulfillment of the financial obligations at all levels of government and creates economic incentives for various actors. The evidence of these attempts is the adoption of numerous government programs in the field of public financial management throughout these years. The goal of the present article is to identify whether the implementation of the government programs is conducive or detrimental to the development of fiscal federalism in Russia. The subject of the article is the correspondence between the formally declared goals and objectives of the government programs and the real situation in Russian fiscal federalism. The methodology is based on the descriptive statistical analysis of the major indicators of the budget system and the comparative analysis of the problems, challenges and achievements stated in the government programs. The article collects and analyzes major trends in the development of fiscal federalism in Russia — degenerating structure of the federal budget revenues, increasing dependence of regions on federal fiscal transfers, and imbalances between revenue and expenditure assignments at the regional and local levels. Critical features and contradictions of these documents are also identified. The analysis of the performance indicators present in the latest State Program (2014) allows identifying potential problems in formulating and measuring these indicators and propose alternative indicators as well as other recommendations on the improvement of program documents. The practical significance of the article lies in the development of proposals to adjust indicators for efficient public financial management.