Financial Journal № 5(45) September-October 2018
E. T. Gurvich, M. A. Ivanova
Economic Effect of Population Ageing and Pension Reforms, p. 9-22
The paper considers impact of population ageing on the economic growth and sustainability of pension systems. The analysis demonstrates that ageing has negative effect on the labor force and labor productivity, and thus results in a slowdown of economic growth and an increase of public spending. The most effective policy option is to raise the retirement age, while an increase in contribution rates or other taxes is the worst reaction. This recommendation is relevant for any countries at different stages of aging process, for all types of pension systems, for different demographic scenarios. Simultaneously with the raising of the retirement age, it is necessary to implement the policy aimed at improvement of the human capital quality.
Keywords: population ageing, pension reform, retirement age, economic growth
JEL: J21, J24, J26, H55, E21
A. S. Kovalevskaya, S. I. Nikulina
Government Guarantees as an Instrument for Investment Risk Allocation, p. 23-33
Government guarantees for investment projects are important as a risk allocation instrument encouraging investors to finance socially significant projects. In spite of many advantages, it involves considerable risks for a guarantor and financial stability of a country. Therefore, issues of managing risks connected with government guarantees provision are relevant for many countries especially for the Russian Federation, where existing mechanism of government support by means of guarantees needs changes. The article describes the experience of Brazil and India in government guarantees management in relation to the investment projects. Their practices are especially important for Russia as both countries are its BRICS partners and considered as the most attractive destinations for overseas investment allocation. It is useful for Russia as an investment guarantor in terms of its security improvement and risk management of investment projects during making decisions about guarantees provision. Analysis covers organizational and management specifics of government guarantees in the area of public-private partnership. The study is carried out on such elements of the management system as a creation of guarantee funds to protect investors from investment risks and evaluation of infrastructure projects effectiveness. Based on the analysis, the authors give recommendations on how to improve the government guarantees instruments in Russia.
Keywords: government guarantees, infrastructure investments, infrastructure projects risks, guarantee funds, guarantee support mechanism, contingent liabilities, budget stability
JEL: E62, H54
O. V. Bogacheva, O. V. Smorodinov
Features of Spending Reviews in Ireland: Experience for Russia, p. 34-45
Since the beginning of the recent financial and economic crisis (2007–2008), spending reviews have played an important role in Ireland’s efforts to increase the fiscal space available to government for new, higher priority policies. This goal has been achieved by applying a systematic process of identification of ineffective and inefficient saving programs. The authors of the article claim that experience of Ireland in organization of spending review process could be useful for implementation of this instrument in Russia. First, the case of Ireland clearly demonstrates that regular review of baseline expenditures requires more active role from the government and the Ministry of Finance in allocation of all budget resources. It is also obvious that commitment of the top political and official level is vital for the final success in implementation of this instrument in Russia. As for the Ministry of Finance, it should play a key role in designing the spending reviews’ format, advising the top political level on the selection of topics, scope and parameters of spending reviews, and identification of spending options. Second, success of spending reviews in Ireland is backed by strong legal and methodological framework which regulates rights and responsibilities of each participant in the review preparation process. Formation of such framework is the key prerequisites of successful implementation of spending reviews in Russia. Third, it should be noted that Ireland applies various types of spending reviews depending on a goals set. In Russia, it is advisable first to conduct a number of pilot selective reviews focused on government programs and particular ministries and agencies. After accumulating sufficient expertise, it would be appropriate to conduct a comprehensive spending review
Keywords: spending reviews, federal budget, baseline budget expenditures, legal and methodological framework, saving measures
JEL: H50, H61, H68
V. V. Klimanov, A. A. Mikhaylova, V. A. Yagovkina
Regulatory and Legal Support for the Budget Transparency at the Regional Level in Russia, p. 46-57
The article shows how in the Russian Federation the following concepts are used in normative legal acts and in practice: open (transparent) budget, citizens budget, people’s budget, initiative budget and participatory budget. All the above-mentioned budget types have been consolidated at the regional level in the Russian Federation. The authors present the examples of how these terms are reflected in normative legal documents and and how these types of budgets are correlated, in particular, that the people’s and initiative budgets are similar in content in the normative acts of the regions. The conclusion is drawn that at present the principle of budget transparency can be fully detected in the legislative acts of the Russian regions, thus an open budget system has been created at all levels of government. The authors also emphasize the significant impact of the Ministry of Finance on increase of the transparency degree in budget data.
Keywords: budget transparency, citizens budget, participatory budgeting, citizens involvement
JEL: H72, H76, H79
А. L. Suslina, R. S. Leukhin
Do Tax Incentives for Innovation Work? Evaluation of Effectiveness in Russia and in the World, p. 58-69
In this paper using an overview of existing literature the authors try to find out whether tax incentives are an effective way to boost innovation or there are other factors, which reduce their efficiency in Russia. There is a comparison of tax incentives with government direct support for R&D – the authors conclude that both methods have pros and cons. The article also discusses reasons for low usage of tax incentives in Russia. Moreover, there is a description of key characteristics of the ecosystem necessary for innovation. Based on the provided overview the authors conclude that there is no significant reason to refuse tax incentives usage in Russia. The article provides recommendations to improve tax incentives: research of tax incentives efficiency by the federal government, the “patent box” introduction, creation of tax instruments for innovation stimulation, which can be used by individuals, reduction of barriers to benefits access, discussion of special economic zones efficiency and improvement of their tax regimes etc.
Keywords: tax, tax cuts, incentive for innovation, government support for innovation, tax incentive effectiveness
JEL: H2, H3, K34
S. S. Lazaryan, E. V. Mayorov
Prospects for the Use of DSGE Models by Finance Ministries: The Experience of Global Regulators, p. 70-82
The article provides the analysis of specific model choices of public institutions and international organizations. The authors determine that the majority of central banks in the sample use DSGE models. On the other hand, DSGE models are far less common in ministries of finances. Currently, ministries prefer to use so-called macroeconometric models (MM). International organizations such as the IMF and the OECD have a greater variability of models in use including both DSGE and MM. Based on the academic and practical experience of DSGE modeling the authors find that this type of models is perfectly suitable for the usage in a ministry of finances. The authors also propose that current model selection criteria should be enhanced with accordance to the benefits provided by DSGE modeling.
Keywords: forecast, macroeconomic modeling, macroeconometric models, general equilibrium models, fiscal policy, model criteria
JEL: E02, E60
A. I. Votinov, M. A. Elkina
Estimation of Fiscal Stimulus Efficiency in Russian Economy: Simple DSGE Model With Government Sector, p. 83-96
Dynamic stochastic general equilibrium (DSGE) models are known as a flexible tool for monetary policy analysis. Nowadays this approach is becoming more popular for the analysis of fiscal policy impact on economic development. There are few DSGE models of Russian economy with detailed fiscal sector. In this study a simple DSGE model is developed and calibrated to evaluate the efficiency of fiscal stimulus. In addition, the authors consider the impact of budget consolidation and public-private consumption relationship on fiscal multipliers. The results demonstrate the sensitivity of multipliers to certain parameters. The developed model will form the basis of further research within suggested framework.
Keywords: fiscal policy, DSGE model, government sector, fiscal multiplier, budget consolidation
JEL: E62, E63, H50
V. S. Utkin, A. A. Yurieva
Analysis of the Russian Microfinance Market’s Main Problems, p. 97-107
The article analyzes the legal specifics of the regulation of the microfinance market in foreign countries. The authors investigate the validity of the microfinances perception at the international level as a tool of social policy, through which it is possible to combat social and financial inequalities, and stimulate the public self-employment. The article cites successful examples of anti-bullying state regulation of the microfinance sector, which, combined with the state grants, makes it possible to finance socially unprotected population at a rate much lower than a banking rate. Based on the study of foreign experience the authors conduct the analysis of the Russian microfinance market, identify the pressing problems of the Russian microfinance sector, which require urgent solutions, in particular, on implementation of regulatory arbitration by microfinance organizations and the debt load of the Russian people from microfinance organizations, and provide suggestions for their elimination.
Keywords: microfinance market, microfinance organizations, government regulation of microfinance sector, regulatory arbitrage, household debt load, microcredit, microloan
JEL: G21, G28
M. R. Pinskaya, O. A. Alaverdyan, N. S. Milogolov
Reform of Transfer Pricing Rules in the Republic of Armenia, p. 108-119
The article analyzes legislative novelties in the area of transfer pricing in the Republic of Armenia through the best practices comparison and country’s economic and institutional specifics. The authors’ research approach is based on determination of national economic and institutional special features and outlining the riskiest types of transfer pricing transactions. Through the collected data and the best foreign practices the authors analyze the national transfer pricing rules and policy. As a result of such analysis there are presented several practical recommendations for the modification of tax legislation and transfer pricing rules in the Republic of Armenia. The authors also suggest implementation of possibility to use stock exchange quotes as benchmarks for commodity transactions when applying comparable uncontrolled price method. Introduction of safe harbor rules is also recommended for interests of financial arrangements on related party debt, based on key rates of fiscal markets (Central Bank rate, EURIBOR, LIBOR, SHIBOR and so on). The authors also discuss in details the problems of application of thin capitalization rules in combination with transfer pricing rules and double tax treaties. In addition, the article recommends several practical ideas on streamlining tax administration (setting up transition period without fines and sanctions or testing the existing thresholds for transfer pricing control).
Keywords: tax policy, base erosion, corporate income tax, transfer pricing, commodity quotes, comparable uncontrolled price, OECD, developing countries
JEL: H25, H26
S. V. Krivoruchko
Cryptocurrencies and Approaches to Their Regulation, p. 120-129
It should be recognized that the monetary authorities in all countries of the world were not ready for the emergence and rapid development of digital currencies and their virtual diversity, regardless of the development level of national economy and domestic financial market. Minimization of the threats and risks of crypto-currency spread based only on their smaller issue volume comparing to fiat money is at any rate a shortsighted position. The interpretation of this phenomenon by a central bank has a decisive influence on its policy, which is especially important in the context of financial system globalization. The article provides the analysis of approaches to interpretation of the virtual (digital) currency concepts in central banks of different jurisdictions, as well as a wide range of scientific publications. These data led to the conclusion that it is necessary to develop a common understanding of state regulation in this field at the global level. According to the author, the most reasonable method is the interpretation of digital currencies as an asset, which is due to the inferiority of these financial instruments in terms of money key functions in the classical sense. The author notes the significant progress of central bankers in understanding the nature and capacity of a crypto currency with dominant tendency to strengthen control and supervision over operations with these financial instruments. However, there is also a significant divergence in the development of restrictive, permissive or supportive measures. The article concludes that it is necessary to coordinate the efforts of central banks with governments, other financial bodies and international organizations in this direction in order to adequately and homogeneously react to the development of the crypto currency as a kind of financial innovation without violation of the healthy competition rules in the payment services market and to prevent investors’ exposure to excessive risk.
Keywords: currency, digital currency, cryptocurrency, money, central bank, monetary policy
JEL: E41, E42, E51, E58
K. I. Alaverdyan, R. A. Aleksanyan
Auditing Regulation in the Republic of Armenia, p. 130-135
The article is focused on a comparative analysis of auditing regulation models existing in the international practice. The authors revealed the main differences between these models and noted that currently in the Republic of Armenia auditing activities are controlled through the state regulation model. The article also determines the five levels of legislative system, which regulates auditing activities in Armenia. In addition, with the help of a number of analytical tools the authors estimate the efficiency of the current system of auditing regulation in the Republic of Armenia.
Keywords: auditing, state regulation, public regulation, mixed model of regulation
JEL: M42, M48