Trends in attracting resources to the budgets of regional centers

Abstract

The paper explores the transformations in the state of the budgets of regional centers to formulate recommendations concerning the development of their budget potential. Methodologically, the paper relies on the theory of public finance, supply-side economics, and spatial economics. Applying economic-statistical, structural, logical, and comparative methods, the author identifies the role of repayable and non-repayable receipts in the budgets of regional centers. The analysis covers the period of 2011–2018, when the budget crisis in the Russian regions triggered significant changes in the system of the intergovernmental relations at municipal level. Critical analysis of the key trends in the formation and use of attracted budget resources of regional centers is performed using the case of the Northwestern Federal District of the Russian Federation. The findings point to an increase in the debt burden from 33 to 52 % of the own revenues of the budgets of the regional capitals; a steady trend towards domination of the funds attracted as gratuitous financial assistance over budgets’ own revenues since 2014; a significant growth in the authority delegated from higher levels. Public authorities and local governments may benefit from the research findings while making decisions meant to improve intergovernmental relations and manage the municipal debt.