September 25-30, 2006
The CFP has completed the project Technical Assistance to the North-West Regions supported by the World Bank. The project was implemented in Republic of Komi and Republic of Karelia. Objectives of the project included (1) adjusting intergovernmental fiscal relations to the Local Governance reform framework, and (2) incorporation of principles and methods of performance-based budgeting into common budgeting practices on regional and local levels. The CFP presented results of the project and lessons learned on the completion conference held on September 21, 2006 in Petrozavodsk (the capital of Republic of Karelia).
Results and Lessons Learned
The decentralization that took place in the Russian Federation in the course of economic and political reforms of the 1990s was a spontaneous process that lacked a clearly defined strategy. However, by the end of the century it had some significant achievements to its credit. One such achievement was that regional and local authorities were granted the right to independently plan their respective budgets. In line with the reform concept, a significant portion of expenditure responsibilities were assigned to RF regions and municipalities. At the same time the federal center retained the majority of revenue sources – a feature that is more like to be found in unitary states. How far Russia has traveled along the decentralization road and which direction it will follow in the future – this is the focus of the new article of the CFP experts Galina Kurlyandskaya and Natalia Golovanova
Decentralization in the Russian Federation
The CFP has developed a methodology for comparative appraisal of the level of state administration in the North Caucasus regions that is a component of the budget-supported sector monitoring. The monitoring system as a whole will constitute the information basis for revenue and expenditure forecasts, early detection of negative tendencies in the budget-supported sector, calculation of transfers to the RF subjects and municipalities. One of the monitoring system’s blocks will be information that is necessary for implementing performance-based budgeting (quantity and quality of public services, outcomes of goals and targets, resources used for this purpose etc.). The methodology includes a system of indicators (over 100) to monitor social and economic situation of the regions and make comparisons. The indicators will demonstrate the following: - level of management of regional finances and assets owned by a region, personnel management in the bodies of executive power; - authorities’ efforts to raise the level of business activity in a region; - circumstances under which the national health, education and H&U projects are implemented; - execution of functions legally assigned to a region. The methodology makes it possible to build a comparative rating of management in regions. It was drafted in the course of Technical Assistance to the North Caucasus Regions (the USAID project) and will be used at the office of the Plenipotentiary Representative of the RF President in the Southern Federal District.
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The CFP in the Russian Regions
In the 2nd quarter of 2006 the CFP focused on (1) reforming fiscal relations and providing advice on public finance policy on regional and local levels, (2) transformation of the system of financing education to the principle of per capita normative (standard-based principle), and (3) technical assistance on improvement of fiscal relations between regional and local levels; expenditure responsibilities clarification, and strengthening tax capacity of regional budgets. During this period of time the CFP rendered its services to 15 Russian regions, from the Far East to the North Caucasus…
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The CFP in the NIS Countries
The CFP continues working in Republic of Kazakhstan, Republic of Moldova, and Kyrgyz Republic…
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