Soft budget restrictions of subnational authorities: practice and implications for Russia

Marianna Vinyo, Pavel Kadochnikov, Sergey Sinelnikov-Murylev, Ilya Trunin and Sergei Chetverikov
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Marianna Vinyo: University of Bishop
Ilya Trunin: Institute of economy of transitionary period
Sergei Chetverikov: Institute of economy of transitionary period
Authors registered in the RePEc Author Service: Илья Вячеславович Трунин

Ekonomicheskaya Politika / Economic Policy, 2006, vol. 2, 180-208

Abstract: The economics analysis of the behavior of economic agents, which is determined by the characteristics of financial relations between them, began to study the behavior of enterprises in a planned economy. In particular, it was shown that in a situation where the entity has the ability to get more, not covered by the original terms of financing resources, not only have a chance if received exceed the efficient level of output, but also changes the behavior of the economic agent - his decisions can be aimed at creating conditions for such financing (for example, decisions relating to the high risk of insolvency). In other words, it was shown that the behavior of economic agents affect particularly the relationship between the entity and the decision maker on the provision of financial resources. More recent work in the field of economic theory of public finance have shown that is similar to the relationship between enterprises institutional aspects of the relationship between different levels of government have no less influence on the behavior of sub-national authorities than formal mechanisms of differentiation of income and expenditure responsibilities and tax revenue sharing and intergovernmental transfers.

Keywords: budger; sub-national authorities; restrictions; perspectives (search for similar items in EconPapers)
Date: 2006
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