Chapter 7. Calculations Basing on the Data about Municipal FinancesAcross Regions
Cross-regionalcharacteristic of the budgets of municipal entities
The municipal entities analyzed across regionsare a much less homogeneous sample than large cities. The differences inindicators may be explained by different, sometimes even opposite factors,which are often difficult or impossible to single out. This circumstance setsmore strict requirements in relation to verification of the initial data andsets limitations on the possibility to analyze and model respective processes.Besides, the scope of information available in large cities is not alwaysreadily available for the whole sample of municipal entities.
The analysis of expenditures of municipalbudgets proved to be most complicated. First, the level of expenditures andshares of different expenditure items depend both on real differences betweenmunicipal entities, and division of powers between the regional and municipallevels, which may vary across municipalities in the framework of the sameregion. Second, it is impossible to discern the objective impact of the sizeand location of a municipality from subjective factors relating to municipalpolicies.
Table 7.1 presentsthe expenditure sharing arrangements between regional and local budgets acrosskey items of municipal expenditures. Overall, it corresponds to the generaltrends defined in Chapter 4. The ratios between regional and municipalexpenditures significantly vary across different items. For instance, asconcerns HUS only in one region (the Kabardian-Balkarian Republic) the share ofregional expenditures exceeds 22 per cent, in other regions it is below 8 percent. In the sphere of education, the Leningrad oblast may be singled out interms of centralization of expenditures (44 per cent); the Kabardian-BalkarianRepublic is second with 22 per cent, in other regions this indicator is below18 per cent. The unevenness of distribution of expenditures is much morepronounced in the sphere of education and social policies. For instance, theshare of regional expenditures in the item “Health care” fluctuates from 30 percent (the Chuvash Republic, Saratov oblast, Krasnoyarsk krai) to 76 per cent(the Yevreyskaya AO). As concerns social policies, the dispersion is even moresignificant: in Tver and Sverdlovsk oblasts respective municipal expendituresmake about 12 per cent, while in the Chuvash Republic, Rostov oblast,Krasnoyarsk krai, and Yevreyskaya AO – from 70 to 84 per cent. However,the share of two latter expenditure items is not very large. Therefore,although differences in division of expenditure powers between regions andmunicipalities to some extent affect levels and structures of municipalexpenditures, this impact (at least in the framework of this sample) is not sosignificant as might be expected.
Table 7.2 presents the characteristic ofexpenditures of local budgets across three key items – “Housing and public utilities,”“Education,” and “Health care.” Apparently, the shares of these items varysignificantly in the structures of municipal expenditures, although this factmay be rather easily explained in the majority of regions. For instance, ahigher share of expenditures for HUS in municipalities of the Leningrad oblastresults from the significant centralization of expenditures for education andhealth care at the regional level. Accordingly, a high share of municipalexpenditures for education in the Kabardian-Balkarian Republic is related tocentralization of HUS expenditures. However, the factors behind the extremelylow share of HUS expenditures registered in the Saratov oblast (8 per cent) andextremely high share of expenditures for education and health care (62 and 30per cent respectively) in the Rostov oblast are much less apparent, although inthe latter case it may be partially explained by the southern location of theregion and high level of defrayal of HUS costs on the part of households, whatresults in lower municipal budgetary expenditures for housing and publicutilities.
Expenditure sharing arrangements betweenbudgets of RF subjects and budgets of municipalentities across certain items in 2001 (in %)
Shares of expenditures for HUS, education andhealth care in the structures of local budgets, 2001 (in %)
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