Financial journal № 1(7) January 2011
A. Belenchuk, L. Yeroshkina, S. Prokofyev, V. Sidorenko, A. Siluanov,
Program-based budget: the best practice
Public finance management reform that is aimed at introducing the program-based budgeting system is part of the modernization program developed by the state. The state executive bodies’ double work, their inconsistent interaction scheme and underdeveloped functionality are the issues that became evident when the budget reform started. The executive bodies’ expenditure decrease issue becomes topical. The article authors examine the international best practices gained in the field of program-based budgeting system formation and identify the key approaches used when addressing the issue. They devote much attention to the description of the new approaches used in the field.
Key words: budget reform, result-oriented budgeting, program-based budgeting, organic law on finance laws, public missions, managerial control, harmonized indicators, yearly plans, reports on results
Thin capitalization: the Mechanism of Resistance
The article author examines the international thin capitalization practices. She examines the principles used when the business organization’s expenses are recognized in the books when the interest on debt obligations is paid to the affiliated entities as the income tax base is formed. The author examines what impact the use of the recognition principle makes on the economic entities’ behavior, and the role the expenditure plays as a tax instrument. She looks into how the provisions in the international taxation agreements influence the way the thin capitalization is made on the national levels providing her own suggestions for the way the Russian capitalization rules should be formed.
Key words: thin capitalization, national deficient capitalization rules, affiliated entities’ transactions, international taxation agreements, use of thin capitalization for getting a tax benefit
T. Kulakova, M. Moiseyeva
Industrial Diversification: How Can We Overcome the Barriers?
The article authors dwell on the international practices gained in promoting industrial diversification. One of the key barriers that hamper the process in the emerging economies is the existence of the underdeveloped financial system backed by the vast amount of natural resources and the lack of a chain of production that could integrate the domestic hi-tech companies. As a result, the costs associated with the attraction of borrowed funds become quite high. This is especially true it you take the innovative companies that operate in the SME sector. The article authors identify the ways to form hi-tech sectors on the basis of resource-intensive sectors.
Key words: industrial diversification, financial system, hi-tech companies, chain of production
Formal and informal institutional change: the experience of postsocialist transformation
Diversity of trajectories of post-socialist transforming economies is a stylized fact of this experience of system change. The paper explores the relations between change in formal and informal rules in historical perspective, discussing new institutional views about rationality of formal institutions and detrimental inertia of informal institutions. It submits that an open and complex approach of the entrality of formal/informal rules interaction may give a better explanation to the ultiplicity of national postsocialist pathways.
Keywords: post-socialist transformation, diversity of trajectories, institutional change, formal rules, informal rules, enforcement
Can Russia Build an Innovation Economy?
The article author examines the resource-affluent countries’ economic development trends and identifies the ways in which the rental income is used in the rich countries that chose various development scenarios. The author raises the question of how to extract the rent and use the rental income efficiently in order to improve the Russian economic structure while giving reasons for making the rental income one of the key sources of the Russian economic development.
Key words: resource rent, rental income-based model of economic development, extraction tax, use of natural resources
The IMF: the Lessons to Be Learnt from the Crisis
The article author dedicates her work to the issues associated with the reforming of the International Monetary Fund (IMF). She examines the key problems the organization faces and the difficulties it encounters when building efficient and well-thought-out strategies. The article author stresses that the BRIC countries should play a more active role in the IMF management and the scheme used when the Russian Federation takes part in the IMF operations should be improved.
Key words: International Monetary Fund, world financial crisis, redistribution of quotas, currency wars, financial security
Luxury Tax: a Populists’ Measure or a Way to Improve the Public Budget Income?
The article author examines in what way the public budget gaps can be filled. She identifies the tax rate increase among other measures to be used. The article author maintains that the current taxation mechanism is used inappropriately; first of all, there are ways to improve its use through better tax collection supervision, through the transfer pricing use and through curbing the malafide practices of tax break use. According to the article author, such measures as the malafide taxpayer identification and punishment, corruption elimination in the tax authorities, and the tax debt elimination would be more efficient and would promote the use of the fair taxation principles, whereas the luxury tax introduction would not be so efficient.
Key words: luxury tax, progressive taxation, proportional taxation, inheritance tax, gift tax
Budget Expenditure Use Efficiency
The introduction of the program-based budgeting system is one of the main prerequisites for the efficient budget expenditure use system introduction. The article author examines the international best practices gained in budget formation and budget expenditure use efficiency evaluation. He looks into how the budget expenditure use efficiency is defined in the Russian legislation and gives his own recommendations as to how a comprehensive public expenditure management system can be introduced in Russia.
Key words: program-based budgeting, budget expenditure use efficiency, budget expenditure use efficiency evaluation
Inflation Targeting: a Theoretical Basis
The article author dwells on the inflation targeting and its key characteristics, he offers his own definition to the term that can be of much help to the researchers. He identifies the issues associated with improving the efficiency of inflation targeting, including the ones that emerged during the period of the world economic crisis, and offers the solutions to the problem. He notes that the inflation targeting schemes should be examined in detail on the national level.
Key words: inflation targeting, monetary policy, crisis, transmission mechanism
Personal Income Tax: the Change Scenarios
One of the main goals of the Russian fiscal policy makers is to use all the internal sources of financing extensively. One of the ways of improving the public budget is to raise the personal income tax rate. The article author examines what are the consequences of the personal income tax increase or decrease using a mathematical model that describes the Russian real sector (the Macro+ model).
Key words: personal income tax rate, consolidated budget, tax rate, increase, decrease, GDP, mathematical model, regression equation, payroll, economic growth
N. Kachnova, V. Presnyakova
The Operations of the Private Pension Funds
The article authors dedicate their article to the private pension funds (PPF) that have been operating in the field for 17 years or so. They examine what work results they demonstrate and suggest the steps to be taken to improve their practices. They note that the PPFs are the only institutions that can invest pension savings for the periods of up to 40 years and ensure that people get good interest on the amounts invested.
Key words: private pension funds, private pension funds’ schemes, Federal Financial Markets Service, pension reserves, pension savings
Calculation of the Cost Price and the Right Price for the Medical Services
The medical services pricing is now one of the key issues that needs to be addressed in order to improve the QoS in health care in Russia. The article author examines the advantages and disadvantages found in the methods used today in order to calculate the right price for the medical services. She offers her own time indicator-based methodology to calculate the cost price and the right price for the medical services. The methodology produces more accurate results as all types of expenses are taken into account when the calculations are made. It can be used as a base for building a financial plan of a medical services provider.
Key words: medical service, expenditure types, price of a medical service, cost price calculation, time indicator-based methodology
Managerial Accounting Standards and Higher Education Institutions
The article author raises the question of developing a unified managerial accounting methodology for the higher education institutions which is currently non-existent. The author describes the types of and makes a classification of incomes and expenditures that the government-owned education institutions in the USA have. The researcher also describes the standards to be used for the managerial accounting in the education institutions.
Key words: managerial accounting, education institutions, accounting standards, income and expenditure, funding sources for the education institutions
The Origin and the Future of the Keynesian General Theory (Dedicated to the 75th anniversary of the book’s first publication)
Year 2011 marks the 75th anniversary of the first publication of The General Theory of Employment, Interest and Money by John Maynard Keynes (1936). The article author dwells on the origin of the theory, describes its key provisions and concepts. He notes that it was J. M. Keynes who laid the foundation of the modern macroeconomics as a separate discipline. The article author concludes that the role the Keynesian revolution has played in the economic theory development has always been exceptional.
Key words: J. M. Keynes, The General Theory, Keynesianism, macroeconomics
On the History of Economics in Russia
The article author speaks about the works of the Russian economists of the 19th and 20th centuries. In the Soviet times, only the works of the Marxist Russian economists were ―legalized‖ in this country. Unfortunately, such an approach is often reflected in the way the content of the courses in the history of economics is composed today. However, over the past decade, the information on the renowned Russian economists of the 19th and 20th centuries has been included into the publications prepared by such economists as A. Abalkin, B. Tebiyev, E. Koritsky, G. Nintsiyeva. The article author also examines the way the issue is discussed in the PhD and doctoral theses that have been defended recently.
Key words: history, economics in Russia, Russian expatriate economists
Tax Policy in Today’s Russia Roundtable Discussion
The Editorial Board of the Finansovy Zhurnal (The Journal of Finance) publishes here the materials related to the Tax Policy in Today’s Russia roundtable discussion that was organized in December 2010 by the Budget and Treasury Academy of the Ministry of Finance of the Russian Federation. The representatives of the Ministry of Finance of the Russian Federation, the Federation Council, the staff of the Financial Research Institute and the teaching staff, undergraduate and postgraduate students of the Budget and Treasury Academy of the Ministry of Finance of the Russian Federation took part in the discussion.