Abstract

The administrative reform in Russia, the main declared directions of which were to

reduce excessive state regulation and to improve the quality of public services as well

as transparency and efficiency of public authorities, has been going on for more than

13 years. In some of these areas, considerable progress has been achieved in this period.

However, the positions of Russia in international rankings of government effectiveness

have remained unchanged - or even decreased - since the beginning of the administrative

reform. According to the authors, one possible explanation for this could be the

significant shortcomings of the strategic planning system and its gap with the budget

planning, which makes it difficult to achieve the goals set in the country’s key strategic

documents. The authors consider the main ways to overcome the shortcomings of the

strategic planning system in Russia to be related to its significant simplification through

a radical reduction in the number of documents included in it, which would reduce the

threat of contradictions between them, as well as to bridging the gap between strategic

and budgetary planning, which implies that the socio-economic development strategy

(SEDR) contains development goals in all spheres of public administration, but does not

contain any assessment of the resources needed to achieve these goals, the forecast of

their availability, or the priorities of their distribution in case of lack of resources. In order

to link strategic planning to budget planning, SEDR should operate with the projected

amount of budget resources not connected with the existing obligations, which, even

with a favorable forecast, is unlikely to exceed 10-15% of the current budget expenditure.

Using such means in the medium term, it is impossible to achieve progress in all areas at

the same time. Therefore, it seems appropriate to abandon the setting of strategic goals in

all spheres of public administration for the sake of concentrating funds and efforts on 5-7

priority areas. The article proposes specific measures necessary for the implementation

of these principles in strategic planning.

Key words: administrative reform, quality of public administration, strategic planning, program-target management.

JEL: Н11, H50, H60, H68, O2.

Anna B. ZOLOTAREVA, Cand. Sci. (Law). Gaidar Institute for Economic Policy (1, 3-5, Gazetny per., Moscow, 125993, Russian Federation); Institute for Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (84, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Ilya A. SOKOLOV, Cand. Sci. (Econ.). Institute of Applied Economic Research, Russian Presidential Academy of National Economy and Public Administration (84, Vernadskogo pr., Moscow, 119571, Russian Federation); Institute of Macroeconomic Research, Russian Foreign Trade Academy, Ministry of Economic Development of the Russian Federation (4а, Pudovkinaul., Moscow, 119571, Russian Federation).

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Abstract

The article presents the results of Russia’s social and economic development in 2017

and the first half of 2018, as well as the expected results of the end of the current year

and forecasts for the near future. A comparison of the trends in the development of

the Russian and world economies in the dynamics of gross domestic product (GDP), industrial production, inflation and other significant macroeconomic indicators for the

first half of 2018 is given. The problems, threats and risks associated with ensuring the

acceleration of development, creating prerequisites for the implementation of the Russian

President’s Address to the Federal Assembly dated March 1, 2018, and the subsequent

May Decree on national objectives and strategic tasks of the country’s development

until the year 2024 are analyzed. Particular attention is paid to the impact of investment

activity, foreign sanctions and Russian response measures on the real sector of the

economy as well as social and financial spheres at the federal level. The shortcomings of

the current management system and the problems of creating prerequisites for structural

reorganization of the Russian economy and the transition of its budgetary support on

the basis of the program-target and project principles are considered. The consequences

of economic, budgetary, monetary, industrial, investment and other state policies and

their impact on social progress are analyzed, including the dynamics of real household

incomes, consumer activity, and internal and external turnover. Based on the analysis

carried out, forecasts for macroeconomic indicators and, above all, development of

the real sector of the economy, providing for the acceleration of social progress and

overcoming threats to the economic, scientific, technical and other sovereignties of the

country, are presented.

Keywords: economic policy, finance, social sphere, real sector, world development trends,

federal budget, investment activity, inflation.

JEL: E20, E65, E27.

Aleksandr A. FRENKEL, Dr. Sci. (Econ.), Professor. Institute of Economics,vRussian Academy of Sciences (32, Nakhimovsky pr., Moscow, 117218, Russian Federation).

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Boris I. TIKHOMIROV, Cand. Sci. (Econ.). Institute of Economics, Russian Academy of Sciences (32, Nakhimovsky pr., Moscow, 117218, Russian Federation).

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Yakov V. SERGIENKO, Dr. Sci. (Econ.). Professor, Institute of Economics, Russian Academy of Sciences (32, Nakhimovsky pr., Moscow, 117218, Russian Federation).

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Anton A. SURKOV. Institute of Economics, Russian Academy of Sciences (32, Nakhimovsky pr., Moscow, 117218, Russian Federation).

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Abstract

In different periods, economists and policy-makers have focused their attention on various aspects of fiscal policies, such as the accumulation of public debt and the impact of taxes on growth, the impact of fiscal policies on aggregate demand and the ability to reduce the severity of recessions, as well as the effect that they might have on the incentives of economic operators and on economic efficiency. This paper considers another aspect, which has attracted relatively little attention so far – namely the impact that they may have on the complexity of government operations. The approach proposed in the article would elevate simplicity, on both the spending and the revenue side, to a major criterion that should drive economic policy. The benchmark cases of relatively simple policies are universal healthcare and education programs in Scandinavian and some other European countries. The representative examples of relatively complex arrangement provide numerous means-tested social programs such as the Medicaid in the USA. Tax expenditures are another case of relatively complex policies. Programs like these inevitably become more expensive with the passing of time. Problems of horizontal and vertical equity increase, and they may give rise to growing antagonism to the programs. To deal with these problems, new rules are often created, making the programs progressively more complex. The need for and the importance of simplicity has been largely ignored by economists and by most governments. It deserves a far more prominent place among the criteria that should guide the choice of policies.

Keywords: welfare systems, complexity, universal welfare programs, means-tested welfare programs, tax expenditures.

JEL: H20, H51, H52, H53, I00.

Vito TANZI, Honorary President, International Institute of Public Finance (Poschingerstr. 5, 81679 Munich, Germany).

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Abstract

The article is devoted to the role of the information background in household decisions

on consumption-savings. The issue of behavioral prerequisites for decision-making has

lately become the mainstream of economic theory. The crisis of the “absolutely rational

subject” as a concept led to the development of theories of bounded rationality and

to the search for noneconomic determinants of micro- and macroeconomic processes.

As a result of interdisciplinary studies conducted at the intersection of psychology,

sociology, political science and economics, modern economic theory has been enriched

with new approaches and concepts that better describe the reality than models based on

the axiom of homo economicus. The main limitations of the rationality of economic

entities include the imperfection of information that is available and is at the same time

reliable, as well as the necessary costs of its processing plus the probability of errors.

The present study is intended to make a contribution to this theory by investigating the

impact of the information component in the form of economic news on the behavior of

Russian households in terms of disposition of available incomes. The research was based

on a selection of news for 2006–2016 by the main television channels of the Russian

Federation — the most accessible and trustworthy source of information for households

according to public opinion polls. The news was evaluated as negative or positive with

the help of linguistic and semantic analysis, and afterwards an econometric analysis of

the relationship with economic indicators was performed. It turned out that an increase

in uncertainty (expansion of the “spread of negativity and positivity” news) leads to a

choice in favor of current consumption, which leads to a reduction of savings as the

national investment base. In addition, the authors analyzed the relationship between the

tonality of news and its dynamics with the business cycle. The analysis revealed that the

“information” cycle correlates, with a certain lag, with the business cycle.

Key words: economic cycle, information imperfection, bounded rationality.

JEL: E21.

Stepan S. VINOKUROV, Cand. Sci. (Econ.). St.-Petersburg State University of Eco nomics (UNECON) (21, Sadovaya ul., Saint Petersburg, 191023, Russian Federation).

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Anna A. MEDVED, Cand. Sci. (Econ.). St.-Petersburg State University of Economics (UNECON) (21, Sadovaya ul., Saint Petersburg, 191023, Russian Federation).

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Larisa A. MIERIN, Dr. Sci. (Econ.), Professor. St.-Petersburg State University of Economics (UNECON) (21, Sadovaya ul., Saint Petersburg, 191023, Russian Federation).

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Abstract

The theory of capital structure, developed in the last century, determines the factors on

the basis of which the management of a given company must form its system of financing

decisions in order to optimize the capital structure and, accordingly, to increase the company’s value. Despite the fact that the data of the theory are based on the fundamental

concepts of corporate finance, such as the present value of future revenues, information

asymmetry, and profitability, the tenets of different theories contradict each other. These

ambiguous results concerning the influence of various factors on a company’s capital

structure form the motivation and problem of this study. Decisions on financing a company

have an impact on its value, and therefore its financing method is a very significant

factor for investors, directors and other stakeholders, which makes the study of target

capital structure determinants particularly relevant. The topic of the capital structure of

Russian companies has barely been addressed in existing studies, since most often they

are based on the Western market. Thus, the identification of regularities in the system of

decisions on capital structure through the case study of oil and gas companies in Russia,

as well as the definition of theories that explain these patterns, are of particular interest,

motivated by the ambiguity of previous studies, and the lack of such studies on Russian

companies. Identifying the existing patterns affecting decisions on capital structure and

the theoretical framework that describes them will enable companies to develop their

own system of capital structure decisions.

Keywords: capital structure determinants, Russian oil and gas companies, capital structure

theories.

JEL: G11, G31, G32.

Ekaterina S. ANOSHKINA. National Research University Higher School of Economics (16, Souyza Pechatnikov ul., Saint Petersburg, 190008, Russian Federation).

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Elizaveta I. MARKOVSKAYA, Cand. Sci. (Econ.), Associate Professor. Department of Finance, National Research University Higher School of Economics (16, Souyza Pechatnikov ul., Saint Petersburg, 190008, Russian Federation).

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Abstract

The goals of competition policy have been a subject of debate almost since its inception. Competition agencies in developing countries are tasked with a wider range of goals than their counterparts in developed countries due to specific traits of the economic and institutional environment of the former. Goal complementarity, path-dependence, comparative efficiency of other government agencies and market characteristics specific to developing countries might make antitrust tools more effective and efficient in dealing with problems that are not strictly antitrust-related. However, no goals are 100% complementary, and can sometimes come into conflict. The mechanisms chosen to prioritize the goals can influence the outcome for competition as well as social and consumer welfare. Additionally, even if the goals are conventional, they can be misinterpreted in the course of implementing competition policy. The paper examines Russia’s recent National Plan for the Development of Competition in the Russian Federation for 2018-2020 and some of the goals postulated there to show how they correspond to the theory of industrial organization and the principles of law and economics. A similar analysis is done on the recent Report on regional development of competition in its section on cartels, which shows how the indicators chosen by the FAS Russia to evaluate its cartel policy can shift the emphasis of enforcement, lead to enforcement errors and distort the incentives of the authority itself as well as economic entities.

Keywords: goals of antitrust, goals of competition policy, industrial policy, cartel policy.

JEL: K21.

Andrey Ye. SHASTITKO, Dr. Sci. (Econ.), Professor. Lomonosov Moscow State University (1–46, Leninskie Gory, GSP-1, Moscow, 119991, Russian Federation); Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Natalia S. PAVLOVA, Cand. Sci. (Econ.). Lomonosov Moscow State University (1-46, Leninskie Gory, GSP-1, Moscow, 119991, Russian Federation); Russian Presidential Academy of National Economy and Public Administration (82, Vernadskogo pr., Moscow, 119571, Russian Federation).

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Abstract

The article deals with the development of entrepreneurship at the regional level. The necessity of taking into account the context and its impact on the practice of managing the development of entrepreneurship in the region is justified. For the study of entrepreneurship with the influence of the regional context considered, it is proposed to use the ecosystem approach, which allows focusing on the specific context of business development. Based on the analysis of foreign and domestic sources, the author’s definition of the concept of “regional entrepreneurial ecosystem” is given. It is proved that, due to the uniqueness of each regional entrepreneurial ecosystem, it is advisable to use the configuration approach, which ensures that the diversity and variability of the regional context are taken into account. It is proposed to consider each regional entrepreneurial ecosystem as a set of nine configuration subsystems. The estimation of the configuration profiles implies using area or volume values, formed, in aggregate, by the parameters characterizing the configuration. A methodology for identifying the configuration profile of a given subsystem in a regional entrepreneurial ecosystem is developed. Based on the methodology in question, the efficiency of the configuration profiles of state institutions regulating entrepreneurship in the 85 subjects of the Russian Federation is identified. The approach substantiated in the article makes it possible to develop practical mechanisms for effective management of regional entrepreneurial ecosystem configurations, which, in turn, would contribute to more dynamic and predictable growth of business and investment activities in Russian regions.

Keywords: entrepreneurship, business ecosystem, regional entrepreneurial ecosystem, regional context, configuration approach.

JEL: O17, О18.

Natalia Z. SOLODILOVA, Dr. Sci. (Econ.), Professor. Ufa State Petroleum Tech no logical University (1, Kosmonavtov ul., Ufa, 450062, Russian Federation).

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Rustam I. MALIKOV, Dr. Sci. (Econ.), Professor. Ufa State Petroleum Technological University (1, Kosmonavtov ul., Ufa, 450062, Russian Federation).

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Constantin E. GRISHIN, Dr. Sci. (Econ.), Professor. Bashkir State University (32, Zaki Validi ul., Ufa, 450076, Russian Federation).

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Abstract

This work raises the problem of subsidy distribution to Russian regions for agrarian sector support. Having synthesized legal acts, the authors generated data on the state of support tools in the form of allocations from the federal budget to budgets of Russia’s territorial subjects. It is shown that the new budgetary transfer procedures do not correlate with the efficiency of their use, which contradicts the principles of laws on strategic planning and the use of budgetary funds. On the basis of a methodological review, the main tools for subsidy efficiency analysis are generalized and their applicability in Russian practice is revealed. These methods are largely directed towards the description of efficiency assessment processes and diagnose the result of the use of budgetary funds insufficiently. The authors have improved VNIOPTUSH’s method through adding a number of tools, which ensure the assessment of returns from state support use, taking into account the regions’ natural and economic capacity. New communications are revealed, and the functional dependence of support results on natural and economic conditions of reproduction is examined. These tools increase the objectivity of analytical procedures and the effectiveness of the mechanism of fund distribution between regions. Research based on the advanced method provides new data on the efficiency of budgetary funds use, which considerably depends on the extent to which the agrarian capacity of territorial subjects of the Russian Federation is used. Regions with difficult natural and economic conditions have the best efficiency indicators, whereas regions with favorable conditions for agricultural activities have essential reserves to increase the efficiency of subsidy use, which needs to be considered in future state support distribution.

Key words: budgetary appropriations, agrarian sector, assessment of subsidy efficiency, effectiveness of budgetary funds, distribution of state support.

JEL: H25, O21, Q18.

Denis Yu. SAMYGIN, Cand. Sci. (Econ.). Penza State University (40, Krasnaya ul., Penza, 440026, Russian Federation).

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Alexandr A. KUDRYAVTSEV, Cand. Sci. (Econ.). Penza State Technological University (1A, Baydukova proezd, Penza, 440039, Russian Federation).

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Abstract

Franklin D. Roosevelt’s New Deal is usually treated as an example of successful government regulation of the economy. After Roosevelt’s death, his image was glorified. Until recently, only a few scholars knew the facts forming a completely different image of the New Deal. In this paper, the New Deal programs (regulating industry, agriculture, labor market and financial markets, started by Herbert Hoover) are investigated as a result of a policy which extended the Great Depression. The main lesson is that any attempts to introduce a “New New Deal” can only create negative consequences for the economy. The article examines the actions of the Administrations created by Roosevelt during the Great Depression, which were regulating minimum wages, prices, and level of production. A special role was played by the National Recovery Administration (NRA), which had unprecedented power, combining the executive, legislative and judicial branches of the government. It was an unusually interventionist policy for the United States, which resulted in very slow and painful recovery of the US economy. The Great Depression began as a usual phase of the economic cycle, caused by the credit expansion by the Federal Reserve System, which increased the money supply by 62% from 1921 to 1929. It would have ended in a year, like the crisis of 1921, had it not been for Hoover’s and Roosevelt’s interventionist policies. The American people agreed to the policy of centralization during the Great Depression, because public opinion was prepared for this by intellectuals of the Progressive Era. They were able to convince the public that the Era of the active role of the State had come to the United States. Intellectuals were using their authority to fuel the destructive programs of the New Deal. The glorification of Roosevelt’s image is largely a result of an alliance between the Big State and intellectuals.

Keywords: New Deal, Great Depression, economic crises, economic history of the U.S.

JEL: N12, N42.

Pavel V. USANOV, Cand. Sci. (Econ.), Associate Professor. Faculty of Comparative Political Studies, North-West Institute of Management, RANEPA (57/43, Sredniy pr., Saint Petersburg, 199178, Russian Federation).

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