Regional budget heavy-subsidization determinants: Evidence from Russia

Abstract

Subject. This article deals with the issues of identifying determinants that contribute to Russian depressed regions' overexposure to State aid. Objectives. The article aims to identify the basic determinants of increasing the level of high subsidy dependence of depressed regions of Russia. Methods. For the study, I used the methods of econometric stochastic analysis, time series, coefficients, and logical generalization. Results. The article reveals the key role of socio-economic component determinants, such as the standard of living, unemployment, fertility, in the formation and strengthening of subsidy dependence of depressed regions of Russia. Conclusions. The current development status of heavily subsidized regional budgets of Russia depends on the dynamics of transfer support directly. The standard of living of the population of the regions, tension in the labor market, and investment activity have a major impact on it. The solution of socio-economic problems can contribute to a gradual and systematic exit from the state of heavy subsidy dependence of the Russian depressed regions.