Eng 
Рус Financial Journal Vol.14 No.4 2022
CONTENTS
M.Yu. Malkina, A.O. Ovcharov
Financial Contagion of Russian Companies from the Oil Market under the Influence of Sanctions and Pandemic Shock, p. 8-28
Abstract
The article presents an overview of theoretical approaches to the study of the content and channels of financial contagion, the main methods and models of its quantitative analysis. The results of contemporary domestic and foreign studies devoted to the assessment of the intensity, direction and scale of contagion across countries and industries are discussed. We conclude that Russian researchers pay insufficient attention to this problem. In the practical part of the article, we test hypotheses about the transmission of contagion from the oil market to a number of Russian large companies belonging to different sectors of the economy. Sanctions and pandemic shocks are seen as external triggers for contagion. We use a large amount of oil and stock price data for a period that includes the 2014–2016 monetary and financial crisis and the 2020 pandemic crisis. To distinguish between periods of high and low market volatility, which is necessary to detect contagion, we calculate moving coefficients of variation for oil and stock prices. To identify cases of contagion, we employ the Forbes-Rigobon test, tests for coasymmetry and cocurtosis of distribution. The resulting estimates confirm numerous cases of contagion, with their number increasing as higher distribution moments are analysed. In addition, we conclude that during the 2014–2016 crisis, the Russian oil and gas industry showed the greatest vulnerability to contagion from the oil market. However, the pandemic shock changed the telecommunications sector turned out to be the most susceptible to contagion from the oil market in Russia. The banking sector in both crises showed a high degree of contagion from the oil market. At the same time, companies associated with ferrous and non-ferrous metallurgy, mining and processing of precious metals, as well as the chemical industry demonstrated the greatest resistance to financial contagion.
Keywords: financial contagion, oil market, sanctions, pandemic, testing
JEL: G01, O11, C46
For citation: Malkina M.Yu., Ovcharov A.O. (2022). Financial Contagion of Russian Companies from the Oil Market under the Influence of Sanctions and Pandemic Shock. Financial Journal, vol. 14, no. 4, pp. 8–28 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-8-28.
© Malkina M.Yu., Ovcharov A.O., 2022
N.V. Loktyuhina, O.A. Feoktistova
Improving the Organizational and Financial Models of Employment Assistance in Russia, p. 29-45
Abstract
The article discusses the basics of employment policy in Russia: the organizational model in terms of delineation of responsibilities between stakeholders, and the financial model in terms of the two basic directions of employment policy — passive, in the form of cash benefits to the unemployed, and active, in the form of programs of employment assistance. The authors show that the Russian model of unemployment benefits has lost its original intent: the benefits have become an analogue of social support, since they are virtually unrelated to previous earnings. The unemployment benefit is, in fact, counter-productive, since it contributes to the growth of registered unemployment (including the so-called “professional unemployment”, when the unemployed are not motivated to find a job). As a result, the resources of the Employment Service are wasted and the prospects of its modernization are put at risk. Regarding active employment programs, the authors highlight the following problem: while the implementation of active labor market programs is the responsibility of subnational governments, the mandatory list of such programs is set by the federal government, which constitutes an unfunded mandate imposed upon subnational government by the federal government. In fact, the measures needed to support employment may vary significantly from territory to territory, and the focus of most existing programs is to support the registered unemployed, while motivated job seekers could use job search support before registering. The authors recommend to reform the organizational and financial models of employment services in Russia, first of all by allowing the regions to design their own employment support policies that take into account the specifics of the local labor market. They also recommend to abolish the current noncontributory unemployment benefit in Russia and to replace it with a means-tested income support benefit for the poor.
Keywords: labor market, employment, employment policy, unemployment, unemployment benefits, active labor market programs
JEL: J21, J65, J68
Funding: The article was written as part of the study “Organizational and financial mechanisms to support employment in 2021–2023, aimed at reducing the unemployment rate”, carried out by Financial Research Institute (NIFI) in 2021 under assignment issued by the Ministry of Finance of the Russian Federation (092-00001-21-00).
For citation: Loktyuhina N.V., Feoktistova O.A. (2022). Improving the Organizational and Financial Models of Employment Assistance in Russia. Financial Journal, vol. 14, no. 4, pp. 29–45 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-29-45.
© Loktyuhina N.V., Feoktistova O.A., 2022
N.A. Avksentiev et al.
Impact of National HIV Policy and Funding on Social and Demographic Indicators in Russia, p. 46-63
Abstract
A number of governmental anti-HIV strategic programs are being implemented today in Russia; however, as of 2020, only 74.5% of the infected were aware of their status and only 67.4% of them were receiving the therapy. Under such conditions, it seems reasonable to assess future social and economic consequences depending on various scenarios of centralized financing of anti-HIV activities in the future. With the use of mathematic modelling, an economic analysis was performed for the “no change” scenario of maintaining costs for HIV control at the level of 2020, and a prognosis was made for 4 possible scenarios of national policy changes in relation to federal expenditures: a 25% and 50% increase in expenditures from the level of 2020, a “maximum extensive scenario” (which assumes reaching the upper limit of expenditures with approximately 60% growth while maintaining the current structure of costs), and an “intensive” scenario with an increase in nominal expenditures and shifting costs to purchasing newer third-generation antiretroviral therapy regimens. According to the modelling results, the current financial strategy (the “no change” scenario) in nominal terms will result in HIV mortality growth up to 25 thousand cases annually, the economic burden over the period of 2020–2030 will exceed RUB 4 bln and will not let achieving the national target of “90-90-90” by 2024. Under this scenario, Russia would remain the leader in HIV prevalence among the countries of Eastern Europe and Central Asia. The “no change” scenario would result in indirect economic losses of RUB 3,481.06 bln per year, with epidemiological parameters still high. The most efficient scenario turned out to be the “maximum extensive scenario” that suggests an increase in federal budget expenditures on combating HIV infection by approximately RUB 20 bln annually. This course of events would allow reducing HIV mortality to 5.4 cases per 100 thsd population by 2030, which is comparable to the current HIV mortality in Spain, Italy and Switzerland, and reducing HIV mortality by 111,9 thsd cases to a level comparable to that of the USA, Chile and New Zealand in 2019. The economic benefit from the implementation of this scenario in 2020–2030 would amount to RUB 1,663.02 bln due to decreased direct non-medical and indirect costs in the form of GDP growth and reduced payments of pensions and disability benefits.
Keywords: HIV infection, epidemiology, economic burden, social burden
JEL: I18
Acknowledgments: We thank the staff of Statendox LLC for their assistance with the manuscript.
Funding: Financial support for the study was provided by GlaxoSmithKline Trading LC.
For citation: Avksentiev N.A. et al. (2022). Impact of National HIV Policy and Funding on Social and Demographic Indicators in Russia. Financial Journal, vol. 14, no. 4, pp. 46–63 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-46-63.
© Avksentiev N.A. et al., 2022
E.I. Dobrolyubova, A.N. Starostina
Efficiency of Regional Public Expenditures on Education and Healthcare: Evaluation from Citizens’ Perspective, p. 64-78
Abstract
International comparisons demonstrate that Russia lags behind OECD countries in terms of citizen satisfaction with the quality of public services in education and healthcare. However, traditionally public perceptions of the quality of service delivery are not taken into account when evaluating public expenditures. Given the overall client centricity trend in the Russian public administration, the assessment of public expenditures on the basis of citizens’ satisfaction with the quality of public services is highly relevant. The paper proposes and implements an approach to evaluating the efficiency of public expenditures on primary and secondary education and primary healthcare based on the ratio of citizens’ satisfaction with the quality of public services and per capita expenditures from regional consolidated budgets. The authors demonstrate that citizens’ perceptions weakly correlate with the level and dynamics of budget expenditures on primary and secondary education and primary healthcare services. Thus, citizens’ priorities and expectations are not fully accounted for in the budgeting process. The proposed approach helped to identify Russian regions with high and low efficiency of public spending on primary and secondary education and primary healthcare. It is recommended to use this approach as a diagnostic tool for identifying regions and sectors requiring in-depth public expenditure review and to expand the proposed approach to evaluate public spending from citizens’ perspective in other areas.
Keywords: quality of public services, inter-regional differences in the efficiency of public expenditures, citizens’ satisfaction
JEL: H75, I18, I22
Funding: The article was written on the basis of the RANEPA state assignment research program.
For citation: Dobrolyubova E.I., Starostina A.N. (2022). Efficiency of Regional Public Expenditure on Education and Healthcare: Evaluation from the Citizens’ Perspective. Financial Journal, vol. 14, no. 4, pp. 64–78 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-64-78.
© Dobrolyubova E.I., Starostina A.N., 2022
Yu.V. Belousov
Transparent Budget in the System of Public Administration, p. 79-91
Abstract
In the current digital age, budget transparency becomes an important characteristic of the quality of public administration. Over the past two decades, there has been a rapid increase in the level of openness of budget data. However, this is not happening in all countries; the gap in the level of transparency is striking, and it is growing. To a large extent, this level depends on the concept of public administration adopted by this or that state. The paper examines the peculiarities of the budget openness policy in the three most common public administration systems: the Weberian model, New Public Governance and New Public Management. In the countries practicing the Weberian system, budget openness is not maintained or is treated formally. The New Public Governance system, in terms of budget transparency, is mostly focused on the development of democracy rather than on addressing financial issues. New Public Management is aimed at improving the efficiency of public administration. This requires a high level of budget data transparency. However, this level has not yet been achieved; therefore, the real impact of the New Public Management system can only be expected in the future.
Keywords: public finance, public administration, transparent budget, weberian, new public governance, new public management
JEL: H61, H72
For citation: Belousov Yu.V. (2022). Transparent Budget in the System of Public Administration. Financial Journal, vol. 14, no. 4, pp. 79–91.
https://doi.org/10.31107/2075-1990-2022-4-79-91.
© Belousov Yu.V., 2022
V.Yu. Dodonov
COVID-19 Pandemic as a Factor of Public Debt Increase. The Case of Kazakhstan in the Global Context, p. 92-107
Abstract
One of the main effects of the COVID-19 pandemic is a significant aggravation of the debt burden in most countries of the world, due to increased costs to support the economies. In Kazakhstan, similar problems also caused a significant increase in the volume of public debt and expenses for its servicing, while due to the specifics of the country’s economic model, the channels of influence of the pandemic on the debt sector were more numerous because of the impact of external shocks. The growth of government debt and the debt servicing cost during the pandemic years was affected by such factors as the growth of budget’s expenditures to support the economy; a drop in revenues due to lower oil prices; the devaluation of the tenge and growth of the cost of servicing external debt; increase of interest rates in the domestic debt market. A comparison of the parameters of public debt increase and loss of economic growth based on the ratio of these two indicators is proposed as a generalized indicator of the effectiveness of debt buildup during the pandemic. This approach showed that the debt increase in Kazakhstan was quite effective. Nevertheless, the effects of the fight against the pandemic had a serious negative impact on Kazakhstan’s public finance system, and in the debt sphere the main problem now is the escalation of debt servicing costs, which will be a significant burden on the budget process, at least for the next few years.
Keywords: COVID-19, government debt, budget deficit, debt service, devaluation, bond yields, economic growth
JEL: H63
For citation: Dodonov V.Yu. (2022). COVID-19 Pandemic as a Factor of Public Debt Increase. The Case of Kazakhstan in the Global Context. Financial Journal, vol. 14, no. 4, pp. 92–107 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-92-107.
© Dodonov V.Yu., 2022
G.V. Semeko
Central Bank Digital Currency: New Opportunities for Cross-Border Payments, p. 108-121
Abstract
In the context of the rapid growth of international cash flows under the influence of globalization and digitalization of the world economy, the disadvantages of the correspondent banking network for crossborder money transfers are becoming increasingly obvious. Cross-border payments continue to be largely based on the old correspondent banking model, which has not quite benefited from the flow of innovations. New technologies have the potential to facilitate fast, low-cost, transparent and scalable payments. There is a need to modernize international payment systems and to develop alternative payment instruments based on new financial technologies. Central banks and the payments industry are considering ways to improve cross-border systems. One of the most relevant and widely discussed new payment instruments is the central bank digital currency (CBDC). А consensus has been reached in the global community on the expediency and profitability of introducing this new form of fiat money into retail payments, and a large number of countries are implementing relevant projects. In contrast, the promotion of the CBDC in the field of wholesale payments is lagging behind. However, studies confirm viability of using the CBDC in wholesale cross-border payments. A number of central banks are working on wholesale cross-border payment models, and international cooperation among central banks on wholesale CBDC, including for cross-border payments, is intensifying. The article discusses how cross-border wholesale CBDC can address challenges of the existing correspondent banking arrangement. The main purpose is to analyze the results of the most advanced international projects aimed at creating cross-border payment systems based on CBDC and distributed ledger technology. The design features of the proposed payment models, their effectiveness and potential risks are considered.
Keywords: central bank digital currency, cross-border payments, cross-border payment system, multicurrency payment system, distributed ledger technology, Bank for International Settlements
JEL: B27, Е52, E59, E65
For citation: Semeko G.V. (2022). Central Bank Digital Currency: New Opportunities for Cross-Border Payments. Financial Journal, vol. 14, no. 4, pp. 108–121 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-108-121.
© Semeko G.V., 2022
L.N. Ivanova, O.V. Umgaeva
Trends in the Development of State Integrated Information Systems in the Field of Circulation of Precious Metals and Stones and Their Products, p. 122-133
Abstract
The up-to-date assessment of the open data of participants in the turnover of precious metals, preciousstones and products made of them, given in this article, allowed to justify the need for integration of info rmation systems. The state is called upon, in order to ensure the interests of its citizens, to support the established trend, the current direction of development. A sufficiently large number of risks that hinder the implementation of the state integrated information system in the sphere of control over the turnover of precious metals, precious stones and products made of them at all stages of this turnover (hereinafter referred to as the DMDK GIS) are balanced by theoretical justification and practical application. The scientific and methodological provisions of economic theory are presented, revealing the necessity, tasks and directions of accounting for strategic state resources. The conclusion is made about the need for prompt response to the problems and failures of the already built accounting model on the DMDK GIS platform. Using the example of the selected area, the concept of digitalization of accounting on a single platform for various participants is formulated, demonstrating the importance of regulating the parameters of innovative systems, including for the development of the economy as a whole.
Keywords: accounting model, digitalization of the economy, precious metals, precious stones, strategic resources, gold and foreign exchange reserve, information system
JEL: G18, O29, E52
Funding: the article was prepared as part of the research work of the state task of the Financial Research Institute.
For citation: Ivanova L.N., Umgaeva O.V. (2022). Trends in the Development of State Integrated Information Systems in the Field of Circulation of Precious Metals and Stones and Their Products. Financial Journal, vol. 14, no. 4, pp. 122–133 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-122-133.
© Ivanova L.N., Umgaeva O.V., 2022
A.A. Upravitelev
Bounded Rationality of Decision-Making by Online Microfinance Organizations´ Consumers, p. 134-147
Abstract
Microfinance is very popular in Russia, but this sphere is often associated with a number of socioeconomic problems, one of which is the population’s debt load. Often the clients of microfinance organizations (MFOs) are citizens from the poorest segments of the population who do not have a high level of financial literacy. The trend towards digitalization of the financial sector has a significant impact on the decision-making process of MFO services consumers. The subject of this paper is the problem of bounded rationality of decision-making, typical for users of online services of microfinance organizations. To reduce the negative effects on users of MFO services, the Central Bank reduces the maximum permissible interest rate for this type of organizations, and the Ministry of Finance organizes programs to improve financial literacy. The aim of the study is to estimate the efficiency of existing methods for solving this problem and to propose our own solution based on the concepts of behavioral imperialism. The relevance is that the digitalization of the financial sector is rapidly increasing, since both classic services are moving online and completely new technological financial services (fintech) appear, which requires the user to master new skills of working in the online environment. In conclusion, the author gives his recommendations for financial literacy programs that can reduce the bounded rationality of financial decision-making.
Keywords: behavioral finance, consumer financial decision making, financial literacy, digital nudge
JEL: G41, G51, G53, G21, G28
For citation: Upravitelev A.A. (2022). Bounded Rationality of Decision-Making by Online Microfinance Organizations’ Consumers. Financial Journal, vol. 14, no. 4, pp. 134–147 (In Russ.). https://doi.org/10.31107/2075-1990-2022-4-134-147.
© Upravitelev A.A., 2022
