Public Expenditure in Regions: Current State and Problems (Exemplified by Registries of Expenditure Commitments of the Regions in the Russian Far East)

• Published in: Financial Journal
• Main Authors: Elena B. Veprikova, Aleksei A. Novitskii
• Format: Article in Journal/Newspaper
• Language: English; Russian
• Published: Financial Research Institute 2021
• Subjects: government spending; expenditure commitments; regional development; expenditure commitments registry; compulsory expenditures; initiative expenditures; developmental expenditures; microregion; Finance; HG1-9999; Sakha; Magadan; Kamchatka Krai; Kamchatka; Sakha Republic; Sakhalin; Yakutia
• Online Access: https://doi.org/10.31107/2075-1990-2021-6-117-131; https://doaj.org/article/5f6746b535f2450cbf2b3e71dbb4e292

Exemplified by regions of the Russian Far East, the article presents a view on the current state and problems of managing regional public expenditures, including the focus of public expenditure on regional development. The research is based on the data from expenditure commitments registries in 2019. A major share of budget expenditures is “compulsory” (pre-determined) expenditures, which have limited flexibility and cannot be redirected to different purposes. Under these circumstances, the ability of regional governments to vary the direction of budget spending and finance self-initiated expenditure commitments—in other words, to independently manage the composition of expenditures—is kept to a minimum, which implies low autonomy in managing expenditures. Most of the Russian Far Eastern regions’ government expenditures are aimed at supporting the current volume and quality of public services. The share of developmental expenditures is higher in regions having more budget resources (Sakhalin Oblast), and significantly lower in regions of the northern Far East (Magadan Oblast, Kamchatka Krai, and Sakha Republic (Yakutia)), the latter having higher costs of supporting critical infrastructure under severe climate conditions. In the present situation, regional governments cannot be fully considered as key influencers managing the development of their territories, and only fill the role of executors and lobbying actors for acquiring financial support from the federal government. As a result, it is difficult to account for specific territorial circumstances and development potential, and the overall efficiency of government spending is decreased. In the authors’ opinion, the findings may be applicable to most regions in the Russian Federation.