REPORTING FOR PUBLIC FINANCE

Fiscal Budget Federalism in Russia

This study looks at how regional disparities have changed in Russia

and how they are being managed through the intergovernmental fiscal
relations system. Regional differences have decreased over the previous
20 years, although they are still quite substantial. Despite quicker
development and income level convergence, socioeconomic results in
underdeveloped areas continue to be lower. The COVID-19 and lower oil
prices appear to have had a disproportionately large influence on affluent
regions. Russia differs from other large nations with federal systems of
government in that it relies heavily on direct taxes to fund its regions.
Transfers from the federal budget to the states tend to be associated with
slower growth but do some redistribution by reducing the disparity in real
per capita fiscal spending. With in-kind social transfers making the largest
contribution, the Russian fiscal system delivers levels of redistribution and
risk sharing of about 26 and 18 percent, respectively. Last but not least,
overall federal transfers have a procyclical tendency and are comparatively
insensitive to shocks to regional revenues.

What is Russia's fiscal rule?

The fiscal rule, designed to shield Russia from swings in oil prices
and endorsed by global rating agencies, says Russia cannot spend more
than its non-oil and gas revenues together with proceeds from selling oil
above a particular oil level.
 Federalism refers to the sharing of powers at various levels of
government usually at the local, state, and national levels. Fiscal
federalism focuses on government taxation and government spending to
assist government operations at any level.

intergovernmental finance; more specifically, the division of

expenditure responsibilities and the allocation of revenues to different
levels of government. it is about how Russia's national revenue pie should
be divided between the federal government and its oblasts (Russia's basic
unit of subnational government), and below them, the cities and rayons
(Russia's third tier of government), and which of these levels of government
should be responsible for which type of spending.

It is the study of how expenditure and revenue are allocated across

different vertical layers of the government administration.
 WHATS IN THE PPT

Federalism refers to the sharing of powers at various levels of

government usually at the local, state, and national levels. Fiscal
federalism focuses on government taxation and government spending to
assist government operations at any level.

Russian fiscal federalism is undergoing a difficult phase of

development that is marked on the one hand by the inevitable conflict
between regions that still adhere to the totalitarian state's fiscal "traditions"
and on the other by efforts to preserve Russia as a whole by preventing the
predominance of local interests over national ones.

What is Russia's fiscal rule?

The fiscal rule, designed to shield Russia from swings in oil prices
and endorsed by global rating agencies, says Russia cannot spend more
than its non-oil and gas revenues together with proceeds from selling oil
above a particular oil level.

The study of fiscal federalism examines how to allocate duties among

the federal, state, and local governments in order to increase economic
efficiency and meet a variety of public policy goals.