Issue №1, 2020

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Local fiscal decentralization and competitiveness of regional economy in the northern regions of Russia

 

DOI: 10.34130/2070-4992-2020-1-101-110

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Timushev E.N. – Junior researcher, Institute of Socio-Economic and Power Problems of the North, Federal research center Komi scientific center of the Ural branch of the Russian Academy of Sciences, Syktyvkar, Russia, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The aim of this work is to establish the status of local budget decentralization in the northern regions of Russia in the context of the positive impact of the adequacy of the powers of local authorities on competitiveness and economic development. To achieve the goal, the tasks of a comparative analysis of decentralization, the role and relevance of the applied quantitative indicators, and testing the hypothesis of a positive relationship between decentralization and the level of competitiveness of the economy are being solved. The methods used include an analysis of the dynamics of the selected decentralization indicators for 2008-2018 and correlation analysis of these indicators and the competitiveness of Russian regions. The relevance of the study is due to the importance of an effective local budget policy in creating a favorable environment for the functioning of the private sector of the economy. The effectiveness of local politics largely depends on the adequacy of authority to meet the locally differentiated needs of local taxpayers. For the northern regions, the topic of intergovernmental relations is extremely relevant, since here; the financial capabilities of the budget and the efficiency of the public sector are limited by a set of costly factors and reduced financial independence. It has been established that local budget decentralization in the North is higher than in Russia as a whole. However, due to its outstripping reduction for 2008–2018 there was an alignment of quantitative levels. It is determined that the three indicators of decentralization identified in the work are self-sufficient. A positive relationship between decentralization and the competitiveness of the economy is revealed. This fact is associated with positive channels of influence - an increase in the accountability of authorities to the taxpayer and the predominance of productive areas in the cost structure. The results obtained will find application both in the scientific study of budget decentralization and in the formation of a budget policy to support competitiveness. The directions of further work include the analysis of the causal dependence of competitiveness on decentralization and confirmation of the applicability of the selected channels of interaction.

Keywords: local governance, intergovernmental relations, expenditure decentralization, revenue decentralization, accountability, productive spending.

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For citation: Timushev E. N. Local fiscal decentralization and competitiveness of regional economy in the northern regions of Russia // Corporate governance and innovative economic development of the North: Bulletin of the Research Center of Corporate Law, Management and Venture Capital of Syktyvkar State University. 2020. No. 1. Р. 101–110. DOI: 10.34130/2070-4992-2020-1-101-110.