The Distributed Unity: Issue of Independent Budgets in Russia

Abstract

The article is devoted to the relationship between principles of unity and independence in the construction of a budgetary system. The first of the points of view is that unity is dominant because it corresponds to the constitutional principle of unity of the state. Another position is that the primary is the independence of budgets. The author details the existing arguments in favor and against these positions and formulates a different point of view that these principles are actually not opposite, but complement each other. In this regard, various arguments are made, including the provisions of system theory related to the isolation of monocentric and distributed systems and the concept of system scalability. The historical experience of regulating the budgetary system in the USSR is analyzed. At this time there were a model of “socialist federalism” and principle of “democratic centralism”. The article also addresses the issue of the connection of optimal regulation of the budgetary independence of the regions and the problem of preventing secession in a federal state, which is always relevant for Russia. As a general conclusion, the idea is formulated that the principles of unity and independence of the budgetary system are connected into a single whole. It is an eternal problem for a complex state to find a balance in the distribution of financial powers between the federal centre, regional and local levels of government, in connection with which a simplified understanding of this issue should be abandoned. More suitable to describe the combination of unity and independence in the construction of the budgetary system of Russia, the author believes the expression “distributed unity,” when the basic property is the unity of the budgetary system, but autonomy is needed for its elements in order to achieve maximum efficiency of the financial activity of the state. Perhaps in this case it will be necessary to complete the budget system. In fact, current “de facto” state of affairs, when the federal budget, acting as the center and basis for the budget system, remains its ordinary element, should be corrected.