Importance The article reviews the process of intergovernmental transfers provided for the constituent entities of the Russian Federation. The article analyzes the specifics of the contemporary mechanism for intergovernmental reallocation of funds and describes the methodological and legislative framework of respective transfers, evaluates their impact on regional and local finance. Objectives The research determines the current issues of intergovernmental transfers for the constituent entities of the Russian Federation and formulates promising areas for improving the efficiency of the mechanism. Methods I investigated the dynamism and structure of intergovernmental transfers using methods of economic and statistical analysis. Results I determined factors that made budgets of the constituent entities of the Russian Federation very dependent on intergovernmental transfers from the federal budget. I also found weaknesses of the transfer process that reduced its efficiency, and detected current issues arising from imperfect financial support to governmental power delegated to authorities of the constituent entities of the Russian Federation. The article evaluates the quality of special-purpose transfers management and sets forth my proposals to improve the methodological and legislative framework for intergovernmental reallocation of funds at the federal level. Conclusions and Relevance It is reasonable to evaluate fiscal spending stipulated by federal laws and incurred by budgets of the constituent entities of the Russian Federation. I articulated my proposals to coordinate special-purpose intergovernmental transfers provided to any constituent entity of the Russian Federation under various governmental programs. I indicate what measures should be undertaken to regulate the composition of very specific intergovernmental transfers. The findings can be used to outline areas for budgetary policies in intergovernmental relations, adjust the process and procedure for granting transfers to constituent entities of the Russian Federation.
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