Academic Scientific JournalsFinancial and Legal Mechanisms for Municipal Entity Transformation: Experience of Russia and Other Countries
Keywords:
local self-government, municipalities, municipal amalgamation, fiscal equalization, financial support, interbudgetary transfers, budget reductionAbstract
The amalgamations of municipalities take place in many countries, including Russia. One of the main reasons for this association is the possibility of solving the financial problems of small municipalities with its help, and increasing the efficiency of the use of budget resources. Does the amalgamation of municipalities achieve these goals? The foreign practice of several decades shows that not always after the merger budget funds begin to be spent more efficiently. Russian practice is not so long yet, but now analysis of budget data (for example, alignment of budgetary provision) shows that such conclusions can also be made in Russia. However, this requires a study of the financial security of the newly created municipalities for several years.
The article studies such important areas as the financial reasons for the transformation of municipalities; financial support of merging municipalities from higher budgets in order to ensure all territories of municipalities that are included in the newly created municipality; financial and legal consequences of such an association, i.e. whether it is really effective, as was stated when deciding on the association; alignment of budgetary provision of municipalities.
It is concluded that it is necessary to consolidate the principle of guaranteeing a municipality in Russian legislation at the federal level if it amalgamates with other municipal entities with financial support at a level not lower than that which it had before the merger. The study results can be used to improve Russian legislation regarding the financial support of municipalities in the process of combining them.
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