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Specifics of social welfare function in the economic system of Russia

Vol. 21, Iss. 2, JANUARY 2015

PDF  Article PDF Version

Available online: 18 January 2015

Subject Heading: ISSUES ON ECONOMICS

JEL Classification: 

Pages: 57-66

Efimova L.A. Lobachevsky State University of Nizhny Novgorod - National Research University, Nizhny Novgorod, Russian Federation
milapoly@me.com

The conflict between the categories of "social justice" and "economic efficiency" is an attribute of modern industrial and post-industrial States. The paper presents the indicators illustrating the priority of social orientation of economic systems' development over their efficiency. The indicators include volumes and mechanisms of income redistributions of economic agents. Using the quintile analysis (the case of the USA), the author confirms the trend in the tax burden shift towards wealthier groups of population and the total shift towards more social justice. The paper draws attention to the polysemantic nature of the "social justice" concept both in economic science and in other human sciences. The author analyzes the functions of social welfare to assess justice and uses two approaches, i.e. functional and libertarian, to build these functions. In the capacity of an indicator of redistribution processes, the author proposes to consider the share of consolidated government expenditures in the GDP as an element that characterizes justice. The paper reviews the structure of the Russian consolidated budget expenditures broken down by budget items and in comparison with other countries. The author studies justice and efficiency through the prism of balance of social expenditures and expenditures for the Russian national economy. The conclusions are as follows: firstly, the structure of the Russian consolidated budget (2011-2013) points to a proper balance between "guns and butter", and secondly, expenditures for education can be considered as transactions, which simultaneously help to achieve both efficiency and justice, as they create multiplier effects. However, these expenditures in Russia are less than in many other countries. The lag restrains the strategic development of the Russian economic system. Thirdly, the Russian system of resource redistribution in the public sector represents a structure, which is determined by various approaches to justice (the Utilitarian, Egalitarian and Rawls' theories).

Keywords: social welfare functions, public finance, structure, budget expenditures, horizontal distributive equity

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