Lev Freinkman
Published: 2014
Total Pages: 72
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The paper looks at the transformation of intergovernment fiscal relations from the point of view of a regional administration in Russia. It also describes changes in local fiscal management. The Yaroslavl region faces a set of budgetary problems typical for Russian regions in the transition, ranging from budget preparation and managements, scale of extrabudgetary financing and expenditure verification. The paper shows what the actual priorities of regional government policy are, how these priorities are determined and through which channels and mechanisms they are implemented. Between 1990 and 1993, the manner in which the oblast's budget was prepared, approved, and implemented changed considerably, as did the relationship between the oblast and the federal authorities. However, many vestiges of the former system remain. The central government still exerts control over some aspects of the regional budgets, and oblast, city and rayon budgets are not fully separated. But decentralization is proceeding at a brisk pace, faster than the federal authorities can codify the rules for the game. The resulting uncertainty sets the stage for bargaining with the central government and rent-seeking behavior on the part of the region. The allocation of expenditures between federal and regional governments continues to be a very murky process, particularly with respect to the so-called 'national economy' expenditure terms, which include expenditures on industry, agriculture, transport, and other infrastructure. The shift in expenditure responsibility in the social areas, however, has been consistent almost all such responsibilities have been devolved down to the regions, cities and rayons.