Paper/Speech Details of Conference Program for the 14th NISPAcee Annual Conference Program Overview V. Working Group on Public Sector Finance and Accounting Author(s) Elena Fomina Bashkir Academy of PA & Management under the Head of the Republic of Bashkortostan Ufa Russian Federation Title Contradictions of budget reform in Russia File Paper files are available only for conference participants, please login first. Presenter Abstract Contradictions of Budget Reform in Russia The Russian last fifteen years’ reforms represent no their analogue in history. That is why both the legislative base and the realization of these transformations keep up to some internal contradictions. That fact in total refers to the reform of the budget system and budget process in this country, which has been developing in 2005-2006 years. The forwarded changes have got the aim of fulfilling the State construction practice in the Russian Federation with truly federative content. Budget federalism supposes sufficiently autonomic operation of all levels of budgets with transparent share of income and expense functions over state and local power levels, with financial equaling of territories. One of the necessary conditions for these principles’ practice realization is the economic independence of regions and territories. It’s known that regional differentiation according to their economic development level is a reality for all federative states, however, such clear-cut contrasts are typical only of this country. First of all, this is connected with the administrative-territorial division, which has been inherited by modern Russia from the previous highly centralized state. Setting up productive forces in the USSR was being organized according to quite distinctive principles. The 1990’s economic crisis consequences has aggravated redouble this problem concerning municipalities inside the same subject of the Federation. The up-to-date situation in Russia could be characterized as the strong federal centre, and just this circumstance allows starting the transmission of some state functions performance to regions and municipalities. However, such decentralization of expense plenipotentiaries couldn’t be provided with adequate tax decentralization because of the above mentioned reasons. Only 8-10 subjects (total 88) of the Russian Federation could be considered as regions-donors. 80% of total tax incomes of Russian consolidated budget have acquired federal status due to a successful solution of the financial equaling. That one concerns internal relations of almost all regions. Only 350 municipalities from 12000, which have been set up now, have some sufficient potential for self-finance. Complex of “smoothing” funds, which have been used before at the federal level, now passes on to regional budgets. Such statements are confirmed, for example, in the law of the Republic Bashkortostan “About Relations Between Different Level budgets”, accepted on 15.07.2005. According to preliminary estimations more than 70% of incomes of the consolidated budget of the Republic Bashkortostan will be redistributed within the Republic’s budget. That one will really produce dependent disposition in some municipalities and liquidate stimuli in order to increase the income’s base among the other regions, more financially provided. The above and other contradictions of changes could minimize the main reform’s content, just developing democracy from below, realizing by citizens their effective participation in management on local, and, then, state level. Innovations in inter-budget relations appeared in our Republic as early as 1.10.2005 year. There will be considered the first results of forwarded changes in our research. There will be provided concrete recommendations for increasing the productivity of budget regulations and budget process for the regional level.
