Scientific periodical

ISSN 2658-5332

Financial Journal Vol.12 No.1 2020

CONTENTS

Vladimir V. Vagin, Natalia A. Shapovalova
Challenges and Issues of Initiative Budgeting Development, p. 9-26
Abstract
The article examines current issues in initiative budgeting (IB) development in the Russian Federation on the basis of empirical data accumulated during the monitoring of IB development since 2015. The methodology for organizing monitoring and analysis of the received data, developed at the Initiative Budgeting Center of the Financial Research Institute of the Ministry of Finance of the Russian Federation, makes it possible to assess the development dynamics by key indicators, to identify trends, and to formulate current problems in IB development in the Russian Federation. The accumulated information on initiative budgeting provides ample opportunities for constructing analytical variables calculated through aggregation of the data from the primary mass of information. The article outlines approaches to examining various forms of initiative budgeting, and provides some results of a comparative analysis of various types of practices used in the Russian Federation’s regions to involve citizens in budgetary decisions. One of the challenges in the monitoring organization is the need for regular adjustments of the measurement procedure considering current changes in legislative regulations and the practices of initiative budgeting implementation. As part of the monitoring, a separate study area of municipal IB practices is beginning to take shape. The authors review documents that legitimize IB issues in the Russian Federation and in the Russian regions, in particular, presenting the results of an analysis of state programs in the Russian regions. The article summarizes the current agenda and outlines the development of institutional support for initiative budgeting. The conclusions formulated by the authors include a wide range of proposals for improving the initiative budgeting programs and practices in the Russian regions and the Russian Federation as a whole.
Keywords: initiative budgeting, participatory budgeting, citizens’ involvement, co-financing, local selfgovernment, municipal budget, monitoring, program approach
JEL: H72, H76, H79
For citation: Vagin V.V., Shapovalova N.A. Challenges and Issues of Initiative Budgeting Development. Financial Journal, 2020, vol. 12, no. 1, pp. 9–26 (In Russ.). DOI: 10.31107/2075-1990-2020-1-9-26.

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Andrei I. Kostin
Organization of Program- and Target-Oriented Funding for Research in Russia, p. 27-40
Abstract
The relevance of the topic is justified by the fact that program- and target-oriented management methods have become an essential part of modern public finance. They contribute to the implementation of one of the key principles in this area, namely the principle of socio-economic efficiency of expenditures. At the same time, the practice of program- and target-oriented financing is currently evolving, and its final, stable forms have not yet developed. There are a number of serious difficulties in the implementation of program–target methods, in particular those related to the problems of applying formalized procedures for constructing a hierarchy of goals, tasks, and activities as well as linking resource needs to them. With program- and target-oriented funding of science, these problems become even more acute due to qualitative heterogeneity of both direct results and social outcomes. The article analyzes the existing organization of targeted funding in the field of scientific research. In particular, the problems of linking priority areas in the development of science and technology in the Russian Federation to program documents are considered. Presented are the findings of the analysis of target indicators and changes in their values as well as budget allocations for civil science under state programs and national projects in the Russian Federation. It is concluded that, in the framework of civil science spending, the program–target method of managing public spending remains largely formal, and that strategic and program documents and statistical monitoring of activities in the field of education, science, innovation and information technologies are not coordinated by goal setting and priority areas. The author suggests applying a tool for reviewing budget expenditures in the field of R&D as one of the efficient ways to assess the effectiveness of state programs.
Keywords: R&D, efficiency of budget expenditures, funding science, program- and target-oriented methods, state program, national project, review of budget expenditures
JEL: H50, H59
For citation: Kostin A.I. Organization of Program- and Target-Oriented Funding for Research in Russia. Financial Journal, 2020, vol. 12, no. 1, pp. 27–40 (In Russ.). DOI: 10.31107/2075-1990-2020-1-27-40.

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Vladimir V. Gromov
Regional Tax Competition at Different Phases of Tax System Evolution in Russia, p. 41-57
Abstract
The article is devoted to the analysis of tax competition as a phenomenon that began to rise with the transition of Russia to a market economy and manifested itself in different ways in the evolution of the national tax system. The analysis shows the features, reasons, scale and forms of tax competition prior, during and after the well-known Russian tax reform. Being an integral part of Russian economic reality, regional tax competition comes from fiscal federalism and changes depending on the tax autonomy of subnational governments. In addition, it is explained that unregulated tax competition can become harmful and lead to adverse economic consequences. The solution to the problem lies in the field of balance between regional tax autonomy and reasonable federal restrictions, promoting fair tax competition among subnational governments. Systematization of the path traveled plays a key role in many aspects, including understanding of the current tax legislation, harmonization of tax policy at the federal level, and improvement of regional taxation in Russia.
Keywords: factors of production, federalism, regional competition, tax base, tax competition, tax incentives, tax policy, tax reform, tax revenues
JEL: H71, K34
For citation: Gromov V.V. Regional Tax Competition at Different Phases of Tax System Evolution in Russia. Financial Journal, 2020, vol. 12, no. 1, pp. 41–57 (In Russ.). DOI: 10.31107/2075-1990-2020-1-41-57.

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Igor Yu. Arlashkin
Comparative Assessment of Regional Fiscal Capacity Calculation Approaches, p. 58-67
Abstract
Three basic methods are employed to assess the fiscal capacity of territories for fiscal equalization: the representative tax system method, the historical data method, and the macroeconomic indicator method. Each of these methods has its own advantages and disadvantages, while the historical data method is considered the most accurate in terms of approximation of the values of fiscal capacity to actual budget revenues. The aim of the article is to compare the accuracy of assessing Russian regions’ fiscal capacities through various methods, as well as by combining them, and to propose measures to change the current methodology for fiscal capacity assessment. The calculations presented in this article for the Russian regions for 2018 show that, in fact, the representative tax system and historical data methods have a comparable degree of accuracy, and the macroeconomic indicator method is only slightly inferior to them. At the same time, while assessing the fiscal capacity in regard to individual taxes, both the method of historical data and the method of representative tax system may have an advantage in the accuracy of the assessment, the method of macroeconomic indicators being inferior to them (except for the case of corporate income tax). As the author’s calculations show, it is possible to improve the accuracy of assessing regional fiscal capacity through the following measures: (1) not taking into account data for the current financial year, that is, taking into account data for only two reporting years; (2) not adjusting income tax and personal income tax fiscal capacity to the rate of tax revenue growth; (3) using the method of macroeconomic indicators for mineral extraction tax and other tax fiscal capacity.
Keywords: fiscal capacity, tax capacity, representative revenue system, representative tax system, historical data method, macroeconomic indicators method, fiscal equalization
JEL: H73, H77
For citation: Arlashkin I.Yu. Comparative Assessment of Regional Fiscal Capacity Calculation Approaches. Financial Journal, 2020, vol. 12, no. 1, pp. 58–67 (In Russ.). DOI: 10.31107/2075-1990-2020-1-58-67.

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Andrey V. Korytin
Tax Burden Influence on the Foreign Direct Investment Distribution by Economic Industries, p. 68-86
Abstract
Promotion of foreign investment attractiveness, including tax incentive measures, for the purpose of economic development of a country and its particular industries is an important economic and tax policy problem. This article presents the results of construction and estimation of an empirical model that describes the influence of the capital tax burden indicator (average tax rates calculated for Russian economic industries using the OECD methodology) and the rate of return along with other industry characteristics on the distribution of FDI flows among Russian economic industries. Practical limitations derived from capital and investment market imperfections as well as data availability are discussed during the model development process. The results of estimation of various specifications of the constructed model on industry data for 29 Russian industries for the period 2006–2015 through the pool regression method show a generally significant negative effect of the tax burden indicator on foreign investment inflow into industries. For the full model specification, elasticity of FDI flow with respect to the tax burden indicator is equal to 0.88.
Keywords: foreign direct investment, tax burden, average tax rate, rate of return, international tax competition, empirical model, industry data
JEL: C23, F21, H32
For citation: Korytin A.V. Tax Burden Influence on the Foreign Direct Investment Distribution by Economic Industries. Financial Journal, 2020, vol. 12, no. 1, pp. 68–86 (In Russ.). DOI: 10.31107/2075-1990- 2020-1-68-86.

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Yuri A. Danilov 
Economic Model of Compensation Fund in Russia
, p. 87-104
Abstract
The macroeconomic stabilization that took place in Russia has led to a partial transfer of household savings from bank deposits to the securities market. This process determines the relevance of creating institutions to minimize the non-market risks of small investors. As global experience shows, among such institutions, the most important one is the compensation fund. The article discusses projects for the creation of a compensation fund in Russia, previously proposed by the Bank of Russia and the National Association of Stock Market Participants (NAUFOR). The results of recalculating the forecast balance of the compensation fund are presented, based on the previously formulated prerequisites of NAUFOR, but also underpinned by the latest quantitative data, which have changed significantly over the past two years as a result of explosive growth of household investments in the securities market. It is shown that in the new conditions it is impossible to ensure the adequacy of financing of compensation funds on the basis of previously proposed sources. The author presents a new approach to the formation of a compensation fund in Russia, which takes into account not only the new Russian realities, but also the existing global experience in the field of creating compensation funds. In the framework of this approach, the author proposes expanding the list of financing sources for the compensation fund. The article provides forecast estimates of the fund balance and ratios of compensation fund adequacy, calculated on the basis of these proposals, which indicate that this model of the compensation fund is economically viable and could be implemented as soon as possible. Further prospects for the development of a national compensation system, which could include compensation funds operating in various segments of the financial market, are considered.
Keywords: compensation fund, household savings, stimulation of long-term investments, protecting the interests of investors, individual investment accounts, securities, compensation system, non-market risks.
JEL: G18, G20, G23, G28
Acknowledgements: The article is written on the basis of research work carried out at RANEPA within the framework of a state task. The author is sincerely grateful to colleagues who provided critical comments and suggested a number of valuable ideas for a deeper study of the material that formed the basis of this article. The author would like to express his gratitude to Chairman of the Board of NAUFOR Alexey Timofeev, and Manager of the Federal Public-State Foundation for the Protection of Investors and Shareholders Rights Marat Safiulin, as well as the experts of the fund, who performed a detailed critical analysis of several conceptual issues of the proposed model. Special thanks also go to the authors of two anonymous reviews, who conducted a conscientious critical analysis, the conclusions of which allowed the author of the present article to improve a number of provisions in its final version.
For citation: Danilov Yu.A. Economic Model of Compensation Fund in Russia. Financial Journal, 2020, vol. 12, no. 1, pp. 87–104 (In Russ.). DOI: 10.31107/2075-1990-2020-1-87-104.

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Yury A. Spletukhov
Information Technology in the Russian Insurance Market: Development Opportunities, p. 105-116
Abstract
The article deals with the issues related to the use of modern information technologies in the insurance market of the country. In particular, the directions of their application are identified, and the characteristics of modern practice of introduction of such technologies are given. Much attention is paid to the prospects for the use of digital technologies, as well as to the analysis of problems that need to be solved in order to remove obstacles to their wider dissemination. Among the areas of use of information technologies in the insurance market, the following ones are highlighted: delivering information about insurers and their services to customers; preparation of proposals of insurance products and their
sale; collection of information about policyholders; assessment of insurance risks; settlement of the consequences of insurance cases; implementation of document management; accounting and reporting; and interaction with the insurance supervision authority. It is concluded that the use of digital technologies makes it possible to increase the volume of insurance transactions, improve the quality of insurance services, reduce the costs associated with the implementation of insurance activities, and ultimately enhance the effectiveness of insurance as a method of risk management. At the same time, the opportunities offered by digital technologies have not yet been fully realized in the insurance sector, hampered by both objective and subjective circumstances. Among the latter are the material and financial capabilities of insurers as well as a number of existing legislative and infrastructure restrictions in the country.
Keywords: information technology, insurance, insurance market, insurance services, prospect of development
JEL: G22
For citation: Spletukhov Y.A. Information Technology in the Russian Insurance Market: Development Opportunities. Financial Journal, 2020, vol. 12, no. 1, pp. 105–116 (In Russ.). DOI: 10.31107/2075-1990-2020-1-105-116.

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Maria G. Girich, Antonina D. Levashenko, Alexandra A. Koval
From Monetary Towards Non-Monetary Transactions: Consumer Personal Data Protection in E-commerce, p. 117-130
Abstract
The field of electronic commerce nowadays is actively developing and stimulating the use of cashless payments. At the same time, payments for goods and services purchased via the Internet may not always be expressed in financial terms. For example, in the case of non-monetary transactions consumers receive products (goods or services) in exchange for their personal data. At the current stage countries of the Organisation for Economic Co-operation and Development (OECD), in particular the United States and European Union member states, have been raising the issue of the possibility of applying consumer protection legislation to non-monetary transactions (when consumers acquire goods or services in exchange for their personal data), including the possibility to return goods or get a refund for a service by demanding personal data deletion. In Russia, the problem of personal data protection is not examined through the prism of consumer protection legislation. The present research methodology is based on methods of logical, systematic and comparative analysis. The purpose of this study is to analyze the application of consumer protection legislation with regard to regulation
of consumer personal data in non-monetary transactions. Comparison of global trends with existing Russian legislation and development of regulation proposals for Russia are the main results of this study.
Keywords: means of payment, electronic commerce, consumer rights, personal data, non-monetary transactions
JEL: K24, K32, K33
For citation: Girich M.G., Levashenko A.D., Koval A.A. From Monetary Towards Non-Monetary Transactions: Consumer Personal Data Protection in E-commerce. Financial Journal, 2020, vol. 12, no. 1, pp. 117–130. DOI: 10.31107/2075-1990-2020-1-117-130.

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Scientific periodical

ISSN 2658-5332