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Budgetary financing and regional growth in the Russian Federation: balance of investment in the economy and social spending of the regions

Priority areas of development: state and public administration
2015
The project has been carried out as part of the HSE Program of Fundamental Studies.

The conducted research "Budgetary financing and regional growth in the Russian Federation: balance of investment in the economy and social spending of the regions" is a continuation of the research project: "Dynamic sand relationship of human capital, quality of governance and economic growth in the Regions of Russia (2000-2011)" (2013), "Dynamic sand the relationship of human capital, quality of governance and economic growth in Russian regions (2000-2012)" (2014). The main goal of such three years project is to define approaches to the construction of econometric models to assess the development of the 83 subjects of the Russian Federation by indicators of quality of governance, human capital and economic growth.

Methodology: The research methodology is based on statistical analysis of empirical data on the financial and economic and social development of regions, including ratings of socio-economic development of regions, investment ratings of Russian regions, economic and other economic analysis. It was made an attempt to create the mathematical (regression) models to analyze budgetary relationships for the realization of economic and social policy of the Russian regions.

Empirical base of research: It was considered the indicators of  living standards and investment development of regions and made an attempt to study their relationship with the ongoing regional fiscal policies. The objectives of the research were also validation of the following hypotheses: the volume of transfers affects income growth in the region, the dynamics of transfers has a positive effect on the investment potential of the regions, the relationship of changes of subsidies and per capita monetary income. Was analyzed the degree of dependence of regions on transfers and borrowings.

Results of research: The current research examines the factors that influence  on the formation of intergovernmental relations at the Federal and regional levels. While studying the foreign experience of policy of intergovernmental alignments the authors identified key country types of such alignments. The existing approaches and methods of intergovernmental alignments used in Russia were analyzed. Intergovernmental transfers aimed to ensure the budget obligation sand socio-economic growth in regions which differ from each other by natural-geographic, socio-economic and historical factors.

On the example of three regions (Chukotka, Khanty – Mansiysk, Kaluga region) the analysis of the balance of investments in fixed capital, debt obligations and expenditure on socially oriented activities were made. Such regions are significant types of regional policy. 

Level of implementation,  recommendations on implementation or outcomes of the implementation of the results (еhe main results of the study):

  • Development of theoretical bases of interaction of factors of budgetary policy in Russia, which influence on investments in economy and social development for ensuring regional growth.
  • Improving the methodology of research of the relationship of budgetary provision, budget alignment, investment, human capital and socio-economic growth in Russian regions.
  • Creation of regression models on the dynamics and interrelation of fiscal policy, human capital, investment and socio-economic growth in the regions of Russia (2000 – 2014).