Pechenskaya M.A.Institute of Socio-Economic Development of Territories of Russian Academy of Sciences, Vologda, Russian Federation marileen@bk.ru
Importance Considering an escalating fiscal crisis in the regions of the Russian Federation, a special focus should be put on reaching such budgetary and tax competence that would be adequate for the Russian legislation to effectuate its functions. Objectives The paper aims to determine a level of budgetary and tax competence of regional and local authorities. Methods Having analyzed statistical data and systematized scientific stances, I described the concept of budgetary and tax competence of the areas and investigated approaches to its formation. The methodology relies upon a systems approach and comprehensive analysis. Results Regional and local authorities were found to have the low level of budgetary and tax competence that is solely sufficient to form survival budgets, rather than development budgets. The current tax allocation of fiscal competency was proved to provide rather limited opportunities for fiscal self-development of areas in the federation. Notwithstanding differences among the Russian areas in terms of their tax capacity, sources of revenue should be decentralized to the extent needed to enforce fiscal federalism principles. I found certain reserves to increase the financial autonomy of areas. Conclusions and Relevance If the financial autonomy of regions and municipalities is extended and fiscal competence of local authorities is increased, it will smooth the disparity of various authorities' interests in economic efficiency, social equity and macroeconomic stability, and augment the responsibility of regional and municipal bodies for their own managerial decisions and extend the number of self-developing areas.
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