Municipal finance reform and local self-governance in Russia

Andrei Chernyavsky and Karen Vartapetov

Post-Communist Economies, 2004, vol. 16, issue 3, 251-264

Abstract: By analysing Russian local budget revenue and expenditure reform in the 1990s and the early 2000s this article demonstrates that it is the shortcomings of the municipal finance system that are the major obstacle to local self-governance development in Russia. The recent tax reforms resulted in a decrease in local fiscal autonomy. Municipal budget revenues have dropped sharply in relative as well as absolute terms. Despite significant formal expenditure responsibilities, Russian municipalities are completely financially dependent on the higher-level governments. Within regions regional governments tend increasingly to finance the provision of municipal public services. The analysis of the possible budgetary consequences of the new law 'On the General Principles of the Organisation of Local Self-Governance in the Russian Federation', proposed by President Putin, shows that the trend towards fiscal centralisation is likely to continue.

Date: 2004
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DOI: 10.1080/1463137042000257500

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