Financial Journal № 3(5) July 2010
M. Afanasiev, B. Alekhin, A. Kravchenko, P. Kradinov
Program-Based Budgeting: the Goals, the Methods and the Classification
The most well-known way to improve the efficiency of the budget expenditure use is to utilize the program-based budgeting instead of the traditionally used budgeting methods. The rationale behind the use of the program-based budgeting in the Russian Federation is given in the Budgeting Process Reform Plan for the Period of 2004–2006. The key principles of the basic program-based budgeting pattern formation are described in the article. The use of the principles renders efficiency to and streamlines the budget formation process and the budget expenditure use. The article authors focus their attention on the program-based budget expenditure classification. The classification is crucial to ensuring that correct analysis of the budgeting process is made on the macro-level, program functionality and operational level. The classification is also important for determining the levels of responsibility of those who are in charge of the budget funds allocation and distribution.
Keywords: program-based budgeting, budgeting principles, model of the budgeting, рrogram classification
Russia and the WTO. Membership Seeking Issues and the Prospects for the Newcomer
The article author describes the problems Russia faces as a seeker of membership in the World Trade Organization. The author examines what the advantages and disadvantages of the Russian membership in the organization are for the Russian national economy. According to the author, for Russia, the WTO membership is a strategically important step as many of the key aspects of the social and economic development of the country will change when the membership is granted to Russia. To a large extent, the number of advantages and disadvantages the new member has is determined by the efficiency of the Russian foreign policy makers’ efforts, and by the way the large scope of foreign policy instruments is used.
Keywords: foreign trade, WTO, negotiation process, tariff policy, systemic issues, Customs Union
Budget Expenditure Use Efficiency: the Comparative Analysis and the Approaches to the Efficiency Assessment
The program-based budget planning is the most important part of the result-oriented budgeting. The necessity to ensure that the public gets access to the open source information about the budget expenditure and the expenditure use efficiency usually dictates the choice of the program-based budgeting methodology. The article author examines the approaches that are used when the budget expenditure use efficiency is assessed. The assessment methodologies are a tool that can help gain maximal public budget expenditure use efficiency.
Keywords: budget expenditure use efficiency, budget reform, result-oriented budgeting, program-based budgeting, state-funded program
Catching-Up Strategies as a Factor that Contributes to Economic Growth in Russia
The article author identifies the advantages and disadvantages of the catching up strategies seen as the first stage of the innovation introduction process. The most promising catch up development trends are identified. The author examines the priorities in the foreign trade policy formation, and, first of all, tariff and customs policy formation. The new policy is needed to protect the emerging industries and the industries which undergo the infrastructure transformation process.
Keywords: catching up strategy, economic growth, innovations, foreign trade policy, customs tariffs
The Errors in the Profit Tax-Related Forecasts
It is difficult to make the profit tax-related forecasts more accurate, and the process is time-consuming. The reason for this is the large number of factors that affect the forecast-making process. The macroeconomic indicators of the social and economic development and the methodology used by the forecast-makers are among those factors. There is one more aspect to this. The way the conservative approach affects the budget revenue-related forecasts should be examined independently. It is necessary to identify the point where a forecast error starts the data distortion process because the conservative approach was used when making the estimates. The article author examines to what extent the factors that contribute to errors affect the accuracy of the forecasts made. The author summarizes the conclusions made and describes the key methods to be used to improve the profit tax-related forecast-making process.
Keywords: profit tax, forecasts, state budget, public revenue, taxation
The Chinese Foreign Exchange Policy and the Global Investment Process
The article author examines the current global investment process using the approach the Austrian economic school members used. He notes that the approaches suggested for use by the Keynesian theory-oriented economists and the monetarists do not include the rationale for today’s economists’ attempt to use the government intervention as a tool for improving the situation in the global economy. The article author stresses that the Chinese factor is a key factor that forms the development trends in the world financial system and the international real sector investment process.
Keywords: Austrian school of economic thought, investments, malinvestments, China, foreign exchange policy, foreign exchange rate, saving rate, interest rate, demographic policy, spontaneous market order
K. Belov, E. Ignatenko
The Russian Extraction Tax Differentiation as a Factor in Making Gas Production Sector Projects More Attractive for Investors
The article examines how the Russian extraction tax-related taxation terms and conditions can be improved. The article authors state that today the tax collection system used to collect taxes from the gas production sector players is based on the use of a single approach, so there can be no tax differentiation based on the conditions where the raw material is produced. The authors stress that the tax regulations in the gas production sector should be implemented in such a way that the producers get an impetus to produce more gas. They also describe a differentiation scheme they suggest for use in order to make the extraction tax amount different for different taxpayers. Keywords: gas production sector, extraction tax, tax regulations, differentiation in taxation
IAS-Based Accounting and the Hedging Efficiency
The article author examines the methodology of the hedge accounting. It is one of the complex practical aspects within IAS 39. She examines the assessment methodology used when the hedging efficiency is assessed. The methodology is to be used in order to develop a hedging efficiency test that can be introduced into the business practices.
Keywords: accounting criteria, hedging, hedging efficiency, efficiency assessment methodology, international standards
Structural Analysis and Synthesis Used for Managing Companies’ Competitiveness
The article author addresses the issue of the business company competitiveness management. She suggests that the structural analysis and synthesis methods be used in order to substantiate the requirements to be met when each of the components of the management pattern is described and in order to help identify more accurately the weighting factors within the currently available patterns where the company’s competitiveness is described. This can help the companies better adjust their operations to the fast-changing business environment and improve their financial performance characteristics.
Keywords: structural analysis and synthesis methods, patterns related to company’s competitiveness, competitiveness management
Transfer Pricing in the Holdings
The article author examines the topical issue of the transfer pricing in the Russian holding companies. She looks into two draft Federal laws issued by the Ministry of Finance and the Ministry of Economic Development in order to cope with the problem. The article author examines the experience gained by the overseas experts in dealing with the transfer pricing issues and focuses her attention on the issue of concreteness associated with the price determination process that is launched when the advance pricing agreement is concluded. The article author suggests that critical assumption-based methodology be used in order to make the transfer pricing change forecasts more accurate.
Keywords: transfer pricing, monitoring of transfer pricing, advance pricing agreement, double taxation
State Special Purpose Budget Planning Programs and the State Financial Control: the Efficiency Assessment Issue
Now that the small budget funds should be used as economically as possible, the state special purpose budget planning programs could become the solution to the problem. One should bear in mind that the following two problems should be addressed on the national level. The budget funds allocated for use within the framework of the special purpose program development should be used in a more efficient way and the assessment scheme to be used to assess the state financial controllers’ efforts should be elaborated. The article author examines various efficiency assessment methodologies used when the budget planning programs are assessed, performs comparative methodology analysis giving the theoretical underpinning to the choice of the best methodology and describes which amendments are to be made to the available methodologies.
Keywords: state financial control, efficiency of the financial control-related measures, assessment of the budget expenditure use efficiency, assessment of the special purpose budget planning program efficiency
The Methodologies of the «Network» Law: What are the Prospects of Finding a Solution to the Tax Collection Problem?
The article author offers his own definition to the term «network» law. He grounds the assumption that formation of a special legal regulation body will become one of the tasks of the network government in the near future. The body to be formed is to be in charge of dealing with the changing economic processes, the processes that are going on in the customs authorities and other processes. The article author describes another function of the body to be formed. It should take into account the changes that occur in the economic environment on the international and domestic level and adjust the economic policy of the state in order to improve the ways the national economy is managed.
Keywords: «network» law, independent entity, subject of law, tax rate, automatic computation of tax
Intracompany Financial Control
Consistent internal financial control contributes to better performance of the company management. There is no regulation that stipulates that such type of control measures is mandatory for use in the Russian Federation. Many organizations have no intracompany financial control departments and the lack of such bodies undermines the financial discipline. The article author examines the legal basis of the internal financial control bodies’ operations in the state-funded organizations and business companies and describes why it is necessary to pass a Federal law on internal financial control.
Keywords: internal financial control, a company, control environment, specifics of the legal basis, Federal law
Risk Management and the Financial Markets
The article author examines the topical issue of the financial market risk management and describes the characteristics of the risk management methods and techniques. He gives examples of active risk management techniques’ use. He shows how technical and fundamental analysis is performed and explains why these are the most efficient methods to be used to decrease the risks when operating on the securities market.
Keywords: financial risks, risk management, stock market, currency market, default, securities
The Phenomenological Method in the History of the Russian Legal Philosophy
The question of why the Russian legal philosophy stands out is topical. The article author dwells on the history of the Russian law. In particular, he speaks about the way the Russian experts in legal science, first of all, N. Alekseev used the phenomenological method in their research. This is a method of research that helps the researchers lay bare the unknown relationships and paradigms that exist in a certain field (legal field included).
Keywords: law, law-governed state, philosophy of law, sociology of law, phenomenology
The Financial Literacy and the Financial Standing of the Individual Households and Individuals
The article author systemically describes the key ways in which the financial literacy contributes to the improvement of the financial standing of the individual households and the individuals. The ability to use the available funds and resources wisely is a critically important factor that contributes to the under-funded individual households’ survival. Many examples taken from the descriptions of the international best practices as well as the Russian and overseas scholars’ research findings prove that there is a correlation between the level of financial literacy and the financial standing.
Keywords: financial literacy, financial education, individuals, households, financial standing
Economic Socialization of Individuals from Different Age Groups
The article author presents the findings of the research made into the psychological aspects of the economic socialization of the preschoolers, teenagers and students of a university where the non-economic disciplines are taught. The author examines how the money-related values infiltrate the socio-cultural strata of the Russian society.
Keywords: economic socialization of an individual, economic behavior, attitude towards money