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Table The restrictedness of the expenditures of the 2003-2005 RF federal budgets and the draft budget for 2006, by the sections (S) and subsections (SS) of the functional classification Titles of sections and subsections S SS FB-2003 FB-2004 FB-2005 DFB-Expenditures of federal budget in general 9.5% 9.7% 11.3% 13.2% ISSUES OF NATIONWIDE IMPORTANCE 1 No data No data 3.9% 6.0% State material reserve 1 10 97.7% 93.5% 83.0% 89.9% Fundamental research 1 11 No data No data 1.8% 1.9% Other issues of nationwide importance 1 15 No data No data 0.1% 0.1% NATIONAL DEFENSE 2 36.2% 37.9% 41.4% 50.6% Armed Forces of Russian Federation 2 1 34.3% 35.8% 32.9% 36.8% Mobilization preparedness of economy 2 3 100% 100% 100% 100% Preparation and participation in collective security measures and peace keeping activity 2 4 No data No data 100% 100% Nuclear-weapons complex 2 5 100% 100% 100% 100% Implementation of international obligations in sphere of national defense 2 6 46.3% 44.6% 45.9% Applied research in sphere of national defense 2 7 No data No data 99.0% 94.0% Other issues in the sphere of national defense 2 8 No data No data 2.5% 8.4% NATIONAL SECURITY AND LAWENFORCEMENT ACTIVITY 3 22.4% 19.5% 29.2% 32.2% Internal affairs agencies 3 2 2.3% 2.7% 5.0% 5.2% Internal service troops 3 3 10.9% 10.5% 12.3% 11.1% Security services 3 6 100% 98.8% 97.8% 96.2% Frontier service agencies 3 7 13.0% 20.2% 100% 98.8% Prevention and liquidation of consequences of emergency situations and natural calamities, civil defense 3 9 49.8% 59.5% 59.4% 62.7% Applied research in sphere of national security and law enforcement activity 3 11 No data No data 76.2% 67.3% Other issues in sphere of national security and law enforcement activity 3 13 No data No data 9.0% 36.4% NATIONAL ECONOMY 4 No data No data 0.1% Other issues in sphere of national economy 4 11 No data No data 0.1% 0.1% HOUSING AND COMMUNAL FACILITIES 5 3.0% Housing facilities 5 1 4.9% EDUCATION 7 2.9% 2.7% Pre-school education 7 1 1.1% 2.3% General education 7 2 0.6% 1.8% Secondary professional education 7 4 1.2% 1.0% Re-training and professional improvement 7 5 18.9% 15.0% Higher professional education 7 6 3.4% 2.9% Other issues in sphere of education 7 9 0.2% 0.5% CULTURE, CINEMATOGRAPHY, AND MASS MEDIA 8 0.1% 0.2% Culture 8 1 0.1% 0.1% Periodical press and publishing houses 8 4 11.5% 9.7% Other issues in sphere of culture, cinematography and mass media 8 6 0.1% HEALTH CARE AND SPORTS 9 3.7% 3.5% Health care 9 1 4.4% 4.0% Sports and physical culture 9 2 0.6% 0.6% Notice. No data the absence of data because of a discrepancy between the old classification of expenditures and the new one.

In general, the effect from the application of the new classifier has been fairly ambiguous so far, because the transparency of the federal budget has decreased rather than increased. It can be assumed that one of the reasons for this state of affairs is that the developers of the classifier have selected the recommendations of the international standards in the sphere of state finance in quite an arbitrary way:

as mentioned above, in accordance with these recommendations, some of defense expenditures were successfully shifted to other sections not dealing with defense, while, for example, the recommendation of the Classification of the Functions of the Bodies of State Administration (CFBSA) concerning the assignment of expenditures on civil defense to the section National Defense was ignored. By and large, the gap between the classification of military expenditures and the UN recommendations on military-expenditures reporting remains unbridged.

The analysis of the restrictedness of expenditures at the level of the federal budgets subsections has made it necessary to take into account the distinctions between the old classifier and the new one, and so the continuous series of data for the years 2003-06 could be obtained only for a number of subsections where the composition of expenditure items remained practically unchanged (see Table 1). As regards some of these subsections, the development of the share of classified expenditures in 2003-and the changes in the degree of the restrictedness of the federal budget as a whole and in the part of its sections National defense and National Security and Law Enforcement Activity are illustrated in Figure 1. It should be immediately pointed out that the tendency towards greater restrictedness of the selected subsections is not so apparent as in the case of sections.

NATIONAL SECURITY AND LAW ENFORCEMENT ACTIVITY NATIONAL DEFENSE RF Armed Forces Federal budget as whole Internal Service Troops Internal Affairs Agencies 2003 2004 2005 Financial Years Figure 1. The development of the share of classified expenditures in some sections and subsections of the 2003-2005 federal budgets and in the draft federal budget for the year Thus, for example, the restrictedness of expenditures on armed forces remained almost the same and continued to insignificantly fluctuate about the 35-percent point, but the restrictedness of defense expenditures grew more than 1.5 times, mainly owing to the emergence of a new subsection, entitled Applied Research in the Sphere of National Defense; it is highly classified and costly at the same time. The rise in the restrictedness of expenditures on security and law enforcement activity was caused to a large extent by a sharp increase in the share of classified expenditures on the frontier service agencies, which coincided in time, perhaps by chance (and perhaps not), with the return of the border guards under the aegis of the Federal Security Service.

The expenditures assigned to such subsections of the functional classification section National Defense as The Mobilization Preparedness of the Economy, The Preparation and Participation in Classified Expenditures Collective-Security Measures and Peace-Keeping Activity, and The Nuclear-Weapons Complex remain completely classified.

Though it is clear that there can be no standards or patterns in the practice of placing budget expenditures on the secret list, and the only correct course in this matter is to strictly observe national interests, nevertheless, it can be quite interesting and instructive to compare the aforesaid practice with another one, based on different principles. Thus, according to our estimates, in the USA, between 6.and 6.7 percent of the Pentagons 2003-2006 budgets are classified, whereas the corresponding secret programs in the framework of the Pentagons expenditures deal mostly with the purchases of armaments and research & development work, whose total share in the expenditures has been fluctuating, in recent years, between 18 and 19 percent, three quarters of which (for example, in the 2006 budgetary request) related to the classified expenditures of the US Air Force, also concealing part of the expenditures of the US intelligence community. It should be noted, however, that it is the US practice to classify as secret also those programs whose aims are not openly announced, and which are denoted by codes or some vague titles. If one chooses this approach for assessing the degree of secrecy, for example, of the draft Russian federal budget for the year 2006, the rise in restrictedness at the level of budget expenditures can amount to at least 3.3 percent, owing only to the items classified as Other Needs in the program part of the expenditures of the federal budget. And, if we take into account the rather vaguely formulated titles of the types of expenditures, like The Maintenance of the Functioning of the Russian Federations Armed Forces or Measures in the Sphere of National Defense, this rise can become even more substantial.

The intensive propaganda campaign, which accompanied the submission, by the government, of the draft 2006 federal budget for the consideration of the State Duma, as was to be expected, has drawn public attention away from those details that deal with the quality and transparency of the draft. The draft was submitted without the two annexes (# 16 and 17) concerning the distribution of federal subsidies and subventions. Moreover, according to the RF Clearing House, the draft lacked any projections regarding the transfers in the amount of 75 billion rubles; there were also violations of the requirements of 32 articles of the Budgetary Code. But the worst deficiency of the draft (from the point of view of the present study) was the absence of those annexes that would have made it possible to assess the structure and effectiveness of expenditures on the Armed Forces they simply vanished from the draft (see Table 2).

Table Secrecy indices of the composition of the RF 2003-2005 federal budgets and the draft federal budget for the year Indices FB-2003 FB-2004 FB-2005 DFB-Number of secret annexes (and number of top secrets thereof) 13 (2) 11 (2) 9 (2) 9 (2) Data on numerical composition of Armed Forces (in secret + + + annex) Distribution of allocations for equipping Armed Forces (in + + + non-secret annex) Thus, despite the fact that the number of classified annexes in the draft federal budget for the year 2006 remains unchanged, as compared to the previous year, the data on the numerical strength of the Armed Forces and the other formations implying military service are now excluded thererom. Also, the present annexes do not contain the data on the distribution of allocations for equipping the Armed Forces, which were traditionally published in the non-secret form.

So far as there were no explanations concerning the reason for the aforesaid changes, it remains hidden from us as yet. It is known that in the past two years there were no substantial additions to the list of data constituting state secrets. It can be assumed that in an efficient state, if the heads of agen Center for Strategic and Budgetary Assessments. Washington, DC.

Finans (Finance). November 21-27. # 43. P. 17.

Finansovyi kontrol (Financial control). 2005. # 11. P. 17.

cies had permitted such a rise in the restrictedness of budgetary data, they would have had to publicly answer some very unpleasant questions.

For now, it can be rather confidently affirmed that such policy has been creating a number of serious obstacles to effective planning, managing, and organizing the interaction, for example, in the Russian defense complex, by increasing the information-related costs to a level that excludes the launching of self-maintaining mechanisms it is likely that in this respect Russia has got caught in a specific institutional trap. It is still difficult to say what price in the percentage points of GDP growth Russia will have to pay for a one-percent rise in the restrictedness of her budget, but the existence of a negative feedback between these two factors is beyond doubt.

Moreover, a considerable part of Russian secrets are secrets only for Russian society, because the government regularly submits, to the OSCE and the UN, the corresponding data on military spending, as well as on the numerical strength of the Armed Forces.

By using secrecy to evade public and democratic control, both the politicians and the officials have converted state secrets into a specific type of rent, permitting them to successfully manipulate public opinion and to rise their personal and departmental status in the eyes of society.

Despite the objective necessity to preserve, in the foreseeable future, the institution of classified expenditures in the sphere of state finance, it will be essential to investigate, time and again, whether the data being placed on the secret list really represents state secrets, or is just an evidence of the incompetence and failures of the state administration. President Putins message to the Federal Assembly in May 2004 still remains vital, being as follows: A transparent military economy is a necessary condition for reform. In this connection, we can consider it sufficiently justified to use the degree of restrictedness of a budget not only as an index of its transparency, but also as a means to assess the effectiveness of the financial, defense, and other agencies.

V. B. Zatsepin The strategy for developing public education and national projects In this overview, the place and role of the national project within the system of strategic documents designed to determine the priorities in the sphere of public education are discussed, alongside an estimation of the adequacy of the measures envisaged in the project for solving the actual problems associated with the development of this sphere, and the mechanisms suggested for its implementation are characterized.

During the discussion, at the meeting with members of the Government, top officials of the Federal Assembly and members of the State Councils Presidium on September 5, 2005, of the key issues of state policy aimed at improving the populations living standards, President of Russia Vladimir Putin put forth the initiative of a national project in the sphere of public education, which represents one of those spheres that directly influence the societys well-being and the growth of its human potential.

It should be noted that the past two years saw a noticeable revival of the Governments activity aimed at developing strategic documents in the sphere of public education, which were to determine the priorities and targets of the State in its support and administering of public education as the most importance one among the resources needed for the formation of the new knowledge-based economy.

Thus, in December 2004, the RF Government approved The Priorities in the Development of Public Education ; in May 2005 The Set of Measures Aimed at Developing the RF Education System for the period until the year 2010 was developed, coordinated and approved by the Government; in September 2005, The Federal Program for the Development of Public Education (FPDPE) in 2006 was adopted.

However, the acuteness and chronic character of some of the socio-economic problems faced by the education sphere, no effect (contrary to expectation) resulting from the budget funds being poured into the implementation of the FPDPE, as well as the need to achieve breakthrough results in respect to the most important issues pertaining to the quality of education, all necessitated the emergence, at the federal level, of a special national project aimed at the sphere of education. In the opinion of the projects developers, it is expected to give a powerful impetus to the whole Russian education system.

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