Journal section "Public finances"

Reaction of Municipal Budgets to State Regulation Measures: Assessment Methodology

Leonov S.N.

Volume 16, Issue 4, 2023

Leonov S.N. (2023). Reaction of municipal budgets to state regulation measures: Assessment methodology. Economic and Social Changes: Facts, Trends, Forecast, 16(4), 168–185. DOI: 10.15838/esc.2023.4.88.9

DOI: 10.15838/esc.2023.4.88.9

Abstract   |   Authors   |   References
The geographical scale of the Russian Federation dictates the need for differentiated spatial implementation of economic strategy and tactics. The municipal component of these processes is particularly important, since a significant part of regional resources is formed at the local level, causing multiplicative effects in the structures operating in the territory. In the conditions of sanctions pressure and lack of funds to finance the development of municipalities, it is necessary to take into account the reaction and extent of activity of local budgets in relation to government incentive measures. It is necessary to understand which municipalities’ budgets react more actively to the managing effects of state policy; this will effectively stimulate the development of municipalities in the conditions of financial constraints of state bodies. The paper proposes and verifies a methodological approach to the comparative assessment of the activity of municipal budgets in terms of measures of state financial support for municipal development. The approach is based on the maximin criterion and is implemented on the example of municipalities included in the Far Eastern Federal District, which is Russia’s largest one. The information base comprises data of the Federal Treasury on the state of municipalities’ consolidated budgets for 11 Far Eastern constituent entities of the Russian Federation for 2011, 2015 and 2020. We analyze the consolidated budgets of all 164 municipal districts and 66 urban okrugs and estimate their comparative activity in relation to the measures of state financial stimulation of municipal development. We reveal high polarization of the activity of local budgets regarding state regulation measures. We show that the budgets of urban okrugs react more actively to government measures than the budgets of municipal districts. The budgets of urban districts formed a group of local budgets with the most active response to state regulation measures. Nevertheless, the transition of the Magadan and Sakhalin oblasts to single-level local government systems consisting only of urban okrugs by 2020 did not contribute to increasing the activity of the budgets of urban okrugs in these regions in relation to state regulation measures in comparison with other municipalities of the Far Eastern Federal District. The proposed mechanism makes it possible to provide territorial administration bodies with methodological tools for in-depth analysis and comparative assessment of the extent of activity of municipal budgets in relation to state regulation measures


municipalities, local budget, stimulation of municipal development

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