PhD in Economics, Head of the Laboratory for Public Finance Development Issues Research, Leading Researcher, Vologda Research Center of the Russian Academy of Sciences, 49, Gogolya Street, Vologda, 160014, Russia


Purpose. To detail the system of indicators and, on their basis, develop an integral index for assessing municipalities’ budget capacity level, which makes it possible to substantiate the choice of a model of financial support for the functioning of local budgets.

Design , methodology , approach. The information base includes works of leading Russian and foreign scientists on the issues under study, reports issued by the Federal Treasury of Russia and the Federal Tax Service of Russia, statistical data from the Federal State Statistics Service and the International Monetary Fund. The research is of complex nature, as it involves a set of fundamental general scientific and special methods, in particular, dialectical and logical methods, horizontal and vertical analysis of financial ratios, statistical and cluster analysis, etc.

Findings. The article presents a system of groups, indicators and author’s method for a comprehensive multidimensional assessment of the municipalities’ budget capacity level. On its basis it is possible to choose an optimal financial support model to support local budget functioning, worked out for municipal districts. The results of integral assessment of the data on the Vologda Oblast taken as a model region, indicate that budget capacity of most municipalities in 2006-2018 was at the average and below average level. Thus, the region misses certain opportunities for development of its budget capacity. At the same time, the conducted calculations show the prevalence of the fourth-type model of financial support for the settlement network, i.e. a differentiated approach depending on the indicator of budgetary provision of settlements.

Research , practical implications. The results obtained contribute to the development of theoretical science and form the foundation for applied use by state authorities and local governments in the implementation of methodological approaches, assessment methods, methodological tools for substantiating budget policy decisions, and can also be used in the scientific activity and educational process.

Originality , value. The scientific value of the research lies in the development of methodological tools for assessing the level of municipalities’ budget capacity when determining the model for financing settlements.

Keywords: Russian Federation, region, budget capacity, municipalities, local government, local budget, assessment

JEL classification: H77, G18, H61

 pp. 43-52

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Doctor of Sciences (Economics), Professor, Head of the Finance and Credit Department, Federal State Budgetary Educational Institution of Higher Education “Vologda State University”, Russia


Candidate of Sciences (Economics), Research Associate of the Sector for Research in the Effectiveness of Management of Socio-Economic Systems of the Department for Issues of Socio-Economic Development and Management in Territorial Systems, Federal State Budgetary Institution of Science “Vologda Research Center of the Russian Academy of Sciences”, Russia


The existence of significant differences in the levels of socio-economic development of Russian regions and the need to determine state impact methods aimed at reducing inequality indicate the existence of territorial differentiation; this is the problem the article authors address. The paper proposes a methodological approach to the assessment of inter-regional differentiation, which helps solve a set of inter-related tasks on the basis of the data of state statistics and expert surveys. To assess the extent and size of territorial inequalities, the variation and Theil indices are used. The correlation and regression analysis discloses a trend to reduce differences among Russian regions in 2005-2017. On the basis of the author’s method, the integral index (aggregating 22 private indicators) is calculated; on its basis, RF subjects are grouped according to a socio-economic development level. The complexity and scale of the differentiation problem is emphasized by the fact that at the end of 2017, 43 subjects belong to the groups with below average and low development levels. The work identifies “backward regions” (18) and “regions with a sign of depression” (13), which should become a priority object of the federal regional policy. The analysis proves the hypothesis about weak influence of the state policy tools of regional development in Russia on processes of territorial development and confirms reduction in the scale and consequences of differentiation. The authors propose a conceptual scheme of the mechanism to manage the process of reducing inter-regional differentiation and overcoming its consequences, which can be used when implementing the Strategy for Spatial Development of the Russian Federation and other strategic planning documents. The results can be used by federal authorities to improve methods and tools for implementing the state policy of regional development, as well as serve as the basis for further research on this topic.

Keywords: Russian Federation, region (RF subject), inter-regional differentiation, gross regional product, convergence.

JEL classification: R1, R5
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