Expenditure Obligations Research Articles

Субнациональные бюджетные правила: зарубежный и российский опыт

The article discusses the rules and restrictions for subnational budgets in Russia and some federative countries, as well as the current level of debt burden of the respective public authority. According to the authors, in the world practice, modern budget rules for the regions are characterized by flexible built-in mechanisms that allow them to adapt quickly to external and internal shocks without making changes in their basic design. This ensures not only fiscal sustainability of public finances at the regional level, but also stability of budget legislation and its law enforcement practice. The authors analyze the arguments pro and contra the application of conditional budget rules, that is, the features of binding certain restrictions of budget parameters (volume of expenditures, regional budget deficit, public debt) to such criteria as the level of transfer dependence, the amount of accumulated debt level, the dynamics of GRP growth rates etc. The analysis of international and Russian practice has led to the conclusion that budgetary rules should not be differentiated based on the level of transfer dependence, that there is a need for tighter restrictions for regions with high debt burden, and that budget rules should be given sufficient flexibility. In order to ensure effective application of new budget rules, the authors propose limiting the practice of making decisions at the federal level that directly affect the expenditure obligations of the regions, and introducing a system of built-in mechanisms to increase fiscal discipline, including encouraging regions that implement responsible fiscal policies and applying sanctions for violating budget rules.

COMPARATIVE ANALYSIS OF TAX CAPACITY IN REGIONS OF RUSSIA

Influence of tax policy of the state and its regions is vital for country’s economy; it is the major source of allocation of expenditure obligations of tax capacity on the sub-federal level. The purpose of this research is to estimate the predictive tax capacity of regions (TCR) and to create a comparative evaluation of regions on the basis of criteria, which are influencing the tax capacity using different methods of evaluation: multiple criteria decision-making (MCDM) and econometric methods. Criteria, which are having the greatest influence on the TCR, were identified on the basis of empirical data both using regression analysis and expert estimates. The objective, subjective, and cumulative weights have been calculated, the degree of concordance of expert opinions was gauged. The comparative evaluation of the TCR in four regions of Russia in 2000–2012 was performed on the basis of MCDM methods.

Determinants of Public Expenditure on Health in India: A Panel Data Analysis at Sub-National Level

This study explores whether political factors and fiscal capacity matter more in explaining the growth and variation in health expenditure than the state’s income in India. The findings suggest that with the widening of political participation and greater representation of diverse population groups in politics, one can see a concomitant rise in government expenditure on health, indicating state interventionism in health sector for political reasons. Government’s desire to increase health spending depends on the availability of financial resources with the states, failing which the probability of fulfilling expenditure obligations towards the sector would be low. In contrast to earlier estimates that income elasticity of health expenditure is nearly equal to or greater than one, the elasticity is found to be less than one which ranges between 0.16 and 0.59. Overall, coefficient estimates of most of these important covariates show an upward bias in terms of magnitude and precision due to the absence of unobserved control factors and of advanced robust estimation techniques.

Reduction in Budgetary Expenditure on Social Services as one of the Russian Economy Stabilization Plan Direction

1. Introduction Double external shock, which the Russian economy experienced in the second half of 2014, gave rise to aggravated expectations of an economic crisis (Minakir, 2015). Along with financial and currency crisis, a budget crisis has become the most real danger for the Russian economy. Geopolitical tensions have led to a slowdown in economic growth, the budget replenishment rate reduced, resulting in the need to counter the growing demands in the area of spending and look for ways to optimize budget spending in order to meet the important needs of infrastructure projects financing. Therefore, during the unfavorable situation in Russian national economy due to the world oil prices dropping and sanctions of the West, the economic development and social stability problems are of particular relevance. In January 2015, the Government of the Russian Federation approved a plan of anti-crisis measures (Order of the Government of the Russian Federation dated January 27, 2015 No. 98-r, 2015), which aims to cut government spending by 5% annually over the next three years to achieve a balanced budget. A significant reserve of budgetary resources saving lies in the optimization of budgetary expenditure in the social sphere (health, education, science and culture). This optimization of social spending does not necessarily mean their reduction, but rather the reduction in inefficient spending by suppressing waste of resources and abuse. The aim of this study is to determine the reserves of reduction in budgetary expenditure while maintaining and/or improving the quality and accessibility of public services in social spheres. 2. Methodology Information research base includes the statistics of the Federal State Statistics Service of the Russian Federation, the official documents of the Ministry of Finance of the Russian Federation, analytical and reporting materials of the Accounting Chamber of the Russian Federation, the Department of the Federal Tax Service of Russia, the Federal Treasury. This research used a variety of methods and tools of scientific knowledge, including methods of system and statistical analysis, analogies, comparative analysis, monographic research, graphical method, and others. The state budgetary strategy comprises the budgetary expenditures, each of which has at least three parameters (Sukharev, 2015): * The value of government spending on a specific budget item (area, sectors, etc.); * time of investment, which would lead to a return (or another effect), with a breakdown of finance by the stages of receipt and use of budget funds; * Total income generated by the results of the budget funds distribution (government spending), as well as income (result) for each specific area of expenditure. 2.1 Dynamics and Structure of the Russian Federation Federal Budget Expenditure Due to the negative effect of geopolitical tensions related to the events in Ukraine, Russia's economic growth in 2014 almost stopped. Dynamics of the Russian federal budget key figures in 2009-2014 are presented in Table 1. The volume of budget expenditure mainly reflects the preferences of the country in relation to the desired size of the government and the scope of its services. Over the past few years, the Russian Federation has seen a clear upward trend in public spending: the Russian Federation federal budget expenditures increased by 46.6% over five years. It should be noted that the actual social and economic situation of the Russian Federation differs significantly from the forecast evaluation, in which most decisions led to an increase in expenditure obligations of the state. In the last few decades, the expenditure of most developed and developing countries were growing to meet the increasing needs of the public in education, science, healthcare, infrastructure, etc. Toughening competition between countries required large budgetary expenditure, especially in science, education, transport, energy (Knobel, 2013). …

Debt Burden of Constituents of the Russian Federation and Its Determinant Factors

Expansion of expenditure obligations of the Russian Federation constituents and municipalities, which results in growing pressure on expenditure of territorial budgets, with preservation of current practice of revenue distribution between budgets of Russian budgeting system and reduction of cheap budget credits granted to regions - the situation when debt finance of budget expenditure and, accordingly, the increasing debt burden on regional budgets, are of current concern. This article analyses debt burden of Russian regions taken in conjunction with its prime budget and economic indices. On the basis of analysis we draw certain conclusions on factors that determine the level of debt burden and tendencies in regional debt behaviour, raise problems which, if solved successfully, will provide for improvement of debt situation in constituents of the Russian Federation. DOI: 10.5901/mjss.2014.v5n24p216

Evolution of Russia’s Budgetary Policy in the 2000s: in Search of Financial Stability for the National Budget System

This paper deals with 2008-2009 crisis which marked a new stage of Russia’s budgetary policy. Although the budget situation in Russia is presently much better than in the majority of the developed countries, reservation of high dependence on oil proceeds, observed trends in in the structure of expenditure obligations indicate the preservation of high risks of an unbalanced budget in long term perspective. Provision of budgetary and macroeconomic balance require adoption of urgent measures both in the sphere of tax policy and budget outlays.

Long‐term Care in Central and South‐Eastern Europe: Challenges and Perspectives in Addressing a ‘New’ Social Risk

AbstractLong‐term care in Central and South‐Eastern Europe (CSEE) has to date been largely neglected in the social policy literature. This article provides an examination of the context and the sources of reform of long‐term care in CSEE, particularly Croatia, the Czech Republic, Hungary, Romania, Serbia, Slovakia and Slovenia. It focuses on studying developments in the light of the major principles underlying the transition process and discussing key features of current developments in terms of their potential for establishing a new paradigm in long‐term care policies. The article argues that the realization of more comprehensive long‐term care systems has been largely hindered by a failure of governments to set priorities in this sector, by the limitations civil society finds in bringing the issue into a broader public debate and by fears that new welfare schemes will substantially extend public expenditure obligations. The findings show that – similar to the situation in most other European countries – long‐term care is a latecomer in welfare state development in CSEE. But ageing societies, growing care needs and broader socio‐economic developments will also increasingly challenge traditional ways of organizing long‐term care and create pressure to find new welfare approaches.

Medium-term financial planning at regional and municipal levels: Problems and instruments

The paper analyses problems in medium-term financial planning, considers the practice and possibilities of the use by executive authorities of Russian Federation constituent members and municipalities of budget planning entities’ reports on the results and main directions of their activities as a medium-term financial planning instrument. Problems of local importance and the fiscal provision of regional and rural municipalities, budgetary and tax policy trends, and the possibilities of financing and fulfilling expenditure obligations by local administrations are correlated.

Business‐Government Relations in Industrializing Rural China: A principal‐agent perspective

This paper explains why rural enterprises prosper in the post-Mao reform era. Based on a case study of Shaanxi province, the paper argues that the institutional arrangements in rural China under economic reforms are conducive to sustained economic growth because the principal‐agent problem is alleviated in two dimensions. First, the interests of local government officials and enterprises overlap. Prompted by the fiscal pressures on local governments as a result of the fiscal reforms, particularly the 1994 tax-assignment reform, local governments are eager to promote local industrial growth. Apart from absorbing rural surplus labour and contributing to the provision of communal welfare to local residents, rural enterprises provide local governments with tax and non-tax revenues to finance their expenditure obligations. In return, local governments provide preferential aid to their enterprises in the form of tax and credit privileges. Second, the principal‐agent problem is abated by a closer effort-and-reward link for the various parties involved in the operation of rural enterprises.

English Government Borrowing, 1660-1688

Borrowing was a necessary and important part of government finance during the period from 1660 to 1688. During Charles II's reign, over twelve per cent of the government's receipts were loans paid directly into the Exchequer and, during some years, loans made up as much as one-third of the total receipts. Clearly borrowing was essential. Anticipatory borrowing, for instance, was necessitated by the very nature of government finance. With the exception of the scheduled payments made by private tax collectors, tax revenues were received by the government irregularly during the course of a year. In addition, the government's expenditure was not easily apportioned over the entire year; in most cases, large lump sums were required, and consequently it was necessary for the government to anticipate future revenue receipts by borrowing in order to meet its current expenditure obligations. Of course the government could have solved this problem by accumulating surplus revenue and using it as reserve from which large payments could be made without recourse to borrowing. But during Charles II's reign, the demands on the revenue were generally larger than the income.Before 1688, in most cases the only guarantee a potential creditor of the government had that the loan would be repaid on time, if at all, was the vague security of the king's word. This was largely the result of the constitutional status of government finance. When Charles II was restored to the throne in 1660, there were no major changes in the constitutional status of government finance.