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In the periphery of Perm Kray, in the city of Kudymkar, the ex-center of Komi-Pemyatsky Autonomous Okrug, developments took a far dramatic turn. In August 2010, seven members of the local Duma stepped down from office and refused to take part in the representative bodys work. As a result, the Duma lost its legitimacy. The rebel Duma members claimed that the main reason for their demarche was the exhaustion of any other ways to maintain the dialogue with the regional executive authorities on the method of election of the local administration head. It cannot be ruled out of course that there were certain economic and political interests behind the demarche; however, an out-of-the-world region managed to establish an unprecedented for todays Russia precedent2.

Similar attempts to abolish mayoral elections in urban settlements in Sverdlovsk oblast and Khanty-Mansy autonomous okrug sparked serious conflicts. In some of these localities, the push for the Federations model was repelled, too. Thus, by contrast with Perm, having known the local residents views, deputies in the city of Surgut refused even to put up the issue of changes in the local administration system for public hearings and retained direct elections of the citys head. According to monitoring of the socio-political situation in Surgut run by the Committee for socio-political analysis and public relations under the Okrug administration, 89% of residents approved general direct election of the citys head, while another 8% favored the concept of city manager, and the remaining 3% found it difficult to answer or believed the citys head should be appointed3.

Overall, according to the available information, as many as 11 out of 20 Russias largest cities have so far managed to retain direct elections4.

6.7.3. Modification of the Election System The tendency of embedding the local self-governance system in the vertical of power also manifests itself in modification of the electoral law. Back in 2005, municipal entities were granted the possibility to choose between the majority system and the mixed or purely proportional systems of municipal elections. In April 2009, the federal legislature made another step forward by establishing a new order according to which at the municipal elections run by the proportional system the right to put up the list of candidates can be granted solely to branches of a political party which, in compliance with the federal law, enjoys the right to take part in elections. Prior to the novelty, the same right had been granted to electoral associations formed by public associations (public organizations, movements) during elections to local self-governance bodies. Nowadays, public associations that do not constitute political parties Posted on the website Rossiyskaya gazeta. Permsky krai. 25 May 2010. Ilya Izotov. Levada-Center: 79 percent of Perms residents spoke for retaining the direct mayoral elections. http://www.rg.ru/2010/05/25/regermkray/opros-anons.html.

Buntari s okrainy. // Expert.ru. 12.08.2010. URL: www.expert.ru/2010/08/12/bunt_okraina/. Access date:

26.01.2011.

Surgutchane za pramyie vybory glavy goroda//Obschestvennaya kompaniya Sokhranim pramyie vybory glaavy Permi. URL: http://www.vyborpermi.ru/node/271. Access date: 26.01.2011.

Index politicheskogo vliyaniya glav 100 krupneyshikh gorodov Rossii // IA REGNUM. Posted: 01:23.12.2010. at http://www.regnum.ru/news/polit/1359603.html. Access date: 26.01.2011.

RUSSIAN ECONOMY IN trends and outlooks enjoy the right for just putting forward candidacies for their inclusion in a party ticket, and this is exercised following procedures set by the Federal Act On political parties. Meanwhile, the problem of securing guarantees of realization of the passive electoral right of citizens who do not hold membership in a political party or an electoral association proved having been delegated to the regional level.

The string of tendencies has been recently complemented by another bill on the proportional system at local elections. Submitted by the RF President, the bill reads that no less than a half of deputy mandates in the representative body of a municipal district or an urban district with the overall number of deputies being 20 and more is to be allocated between lists of candidates put up by electoral associations in proportion to the number of votes each such list of candidates has received. An RF Subjects law can provide for a necessary for access to such an allocation of deputy mandates minimum rate of votes received by the list of candidates, which may not exceed 5% of ballots cast by voters who have taken part in the voting.

These changes concern some 1,200 representative bodies of municipal entities1.

As concerns elections of representative bodies of other municipal entities, including representative bodies of municipal districts and urban districts with the number of deputies under 20, there may be used the proportional electoral system, or the mixed, or the majority one.

The terms of the use of a specific electoral system in such municipal entities are set by an RF Subjects law.

In connection with the aforementioned changes, the bill in question establishes requirements to deputies included in a faction, as well as to factions in representative bodies of municipal entities. The requirements are similar to those set for deputies included in a faction, as well as to factions in the RF Subjects legislative (representative) bodies of state power. More specifically, the faction comprises all the deputies elected on a party ticket; as well, it may comprise deputies who have run in a single-member constituency or in a multi-mandate one.

The faction may comprise a single deputy elected on a party ticket. The deputy of the faction is bound to hold membership in the political party of whose faction he is a member. The deputy elected on a party ticket may not quit the faction. Failure to comply with these requirements results in early termination of the deputy powers.

While assessing the tendencies to strangling the local self-governance, experts point out to a direct connection between the abrogation of direct mayoral elections and the increase of the role the federal parties play in localities. These de facto are two sides of the same coin. It so happens that under such a scenario the municipality administration is formed under the regional authorities intervention, on the one hand, and under the federal authorities intervention, on the other (Russian parties are notorious for their utter centralization and their federal leadership permanently interfering in their regional and local branches operations)2.

Key Take-Aways Transformation of local self-governance into an impotent appendix of the vertical of power is a process that has advanced for several years already, thus not being the distinct character Prezident vnes v Dumu zakonoproekt o proportsionalnoy systeme na mestnykh vyborakh// The state Internet channel Rossiya. 14.12.2010. 09:06. URL: http://www.vesti.ru/doc.htmlid=413763&cid=5. Access date:

26.01.2011.

From the first statement of the GOLOS association by results of a long-term monitoring of municipal campaigns for the elections set for October 10, 2010 (the stages of nomination, registration and the start of the campaign trails). Moscow, 6 September 2010 URL: http://golos.org/a3878.html. Access date: 26.01.2011.

Section 6.

Institutional Problems istic of 2010 only. That is why let us note just two peculiarities of the period in question that characterize the unfolding tendencies.

First, the violation of guarantees of self-governance in Russia drew the international communitys attention. In the autumn of 2010, the Congress of Local and Regional Authorities of the Council of Europe presented the third Report on the state of Russian democracy in the light of implementation of the European Charter on Local Self Government. The Report highlighted serious negative tendencies in the sphere concerned1. More specifically, in order to improve the national legislation in the local-self-governance area, Russian authorities were recommended to:

Abolish recent amendments to art. 74 of federal Act of 6 October 2003 131-FZ On general principles of organization of local self-governance in the Russian Federation that concern dismissal of city mayors so that to guarantee for them the possibility to freely exercise their powers in office without being concerned of interference or political pressure by legislative bodies or governors;

Continue to improve the division of powers between federal, regional and local government bodies and undertake measures on cutting the number of combo mandates and spheres subjected to them;

Appropriate respective funding for local authorities or permit them to collect taxes, as per the Charter, to make them able to exercise their mandate in the area of the public services delivery;

ensure that integration of localities is done only upon holding consultations with respective elected assemblies.

The above list does not comprise all the Congresss recommendations, making it clear nonetheless that they question consistency of some fundamental provisions of the municipal law and recent amendments adopted to further the process of introduction of substantial limits with regard to local authorities autonomy and de facto putting them under the regional authorities political control with the European Charter.

Second, the increasing number of experts has made an unconsoling diagnosis to the state of Russias public administration, with the key word therein being degradation. That said, the process in question is in many ways determined by upsetting the balance in the public governance system, striving to control the whole shooting match out of the center, dumping legitimate channels of the populations influence on adoption of managerial decisions. Let us cite two expert opinions on the issue: Evgeny Gontmakher, Head of the Center for Social Policy of the Institute of Economics of RAS: Degradation of the state has reached such a stage when, enchanted by mirages of vertical of power and managed democracy, the political elite has lost control over the ongoing processes in the country2. Emil Markwart, President of the European Club of Experts on Local Self Government: By all accounts the degradation of public institutions and local self-governance will not just continue, but exacerbate. The populace and the power will be increasingly drifting apart3.

Sovet Evropy postavil Rossii neuteshitelnyi diagnoz.//Echo planet Itar-Tass. 10 November 2010.

http://ekhoplanet.ru/world_500_8910.

Gontmakher.E. Gosudarstvo i obschestvo. Modernizatsiya dlya svoikh. Posted: 20.12.2010 . URL:

http://www.4cs.ru/materials/wp-id_1342/. Access date: 26.01.2011.

Markwart E. Vse mestnoye samoupravili po vertikali. Ot vyborov merov tozhe reshili otkazatsya// -Online.

27.12.2010 URL: http://kommersant.ru/doc.aspxDocsID=1564980&print=true. Access date: 26.01.2011.

Annex Specifics of Skolkovo Project Administration One of the most interesting novations in Russian legal system on 2010 was enactment of federal laws and subordinate legislation regulating the activities of Skolkovo Innovation Center. The following acts regulate the specifics of Skolkovo participants activities: Federal Law No.244-FZ On Skolkovo Innovation Center of October 28, 2010; Federal Law No.243-FZ On Amending Certain Legal Acts of the Russian Federation in Relation with Enacting Federal Law on Skolkovo Innovation Center of September 28, 2010; Directive of the President of the Russian Federation No.446-rp of July 2, 2010; Resolution of the RF Government No.565 On Subsidizing the Key Measures Related to Skolkovo Innovation Center Set-Up and Operations Support from the Budget of Non-for-Profit Organization Foundation for Development of the Center for New Technologies Promotion and Monetizing of July 26, 2010, as well as other acts.

Legal framework regulating the activities of Skolkovo Project participants was developed within the record-breaking short period of time; however, it contains a number of principal novelties, which can be rolled-out to support other areas of social and economic development of the Russian Federation. In particular, the following absolutely new principles were included into this legal framework:

1) An attempt to create friendly administration of the activities of Project participants;

2) Outsourcing the functions of state and local self-government as one of the ways to create a friendly regime;

3) Unprecedented level of tax and customs reliefs versus the effective taxation system.

Speaking about regulatory solutions used for setting up a new innovation center, they became a logical follow-up of previous reforms; however, these old ideas were most radically manifested in the new legal framework for Skolkovo.

Thus, the idea of granting special tax reliefs (a special tax regime) to the residents of one particular territory was implemented at the stage of creating Special Economic Zones (SEZ) for new technology implementation, and the idea of creating infrastructure which the innovation companies could use at the stage of setting up Research and Technology Parks. Neither of these two methods of innovation support taken separately has produced the desired result, however, they provided for developing a system of methods for innovation support which is still operational.

In particular, SEZ function starting from 2005 based on the Federal Law No.116-FZ On Special Economic Zone in the Russian Federation of July 22, 2005. The following types of SEZ are stipulated by the Law (Article 4):

- Industrial Manufacturing Zones;

- Technology Implementation Zones;

- Tourist Recreational Zones;

- Port Zones1.

In addition to that two SEZ function in Russia they were created for the purposes of regional development.

These are Kaliningrad and Magadan zones. They were established back in 1990-s to promote economic development of these regions, they are not subject to regulation providing for tax reliefs.

RUSSIAN ECONOMY IN trends and outlooks Lack of active growth of innovations in Technology Implementation Zones (TIZ) may be to a certain extent explained by the fact that tax reliefs granted in TIZ territories are not significant.

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