Budget federalism in Russia

With formation in Russia of a new budgetary system model in the world economics, scientists single out two concepts of economic development of the society: monetarism and neo-Keynesianism. Russian experience in social-economic reforms was based on monetarism. In the budget sphere it showed in its target orientation on annual federal budget balancing. A set of objective and subjective factors influences the discrepancy in financial needs of the regions: the level of their social-economic development, climatic and natural resources, political and ethnic situation. Regional and national prosperity depends on tax funds. The tax base varies within the country. In RF economic relations the distribution of budgetary authorities and responsibility between the central, regional and local governmental structures is organised according to the principles of budget federalism. Its organisation defines income adjustment between the state and the regions and revenue formation at any budgetary level. The contradictions between budget resources decentralisation and formal tax and budget authorities centralisation are aggravated by macroeconomic conditions instability, democratic institutions fragility, capital market underdevelopment, low production factor mobility, overrated social expectations and demands to the state, contrast in budget provision of RF subjects and municipalities. Russian budgetary federalism and the total of inter-budgetary relations, if compared with other national economic systems, have peculiarities and inconsistencies. The complexity of forming an optimal model of budget federalism, an adequate prospective model of national economy, requires further reforms in the system of inter-budgetary relations.

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