Scientific periodical

ISSN 2658-5332

Financial Journal Vol.12 No.2 2020

CONTENTS

Boris I. Alekhin
Tax Smoothing in Russia, p. 9-24
Abstract
Robert J. Barro developed a theory in which the government borrows to smooth the tax rate over time and thus reduce welfare losses due to changes in the tax rate. Any positive model of fiscal policy must use tax smoothing as a benchmark. Is this so in Russia? The author of the present paper has used a sample of official data on tax and non-tax revenues and expenditures of the Russian government for 2000–2019 (79 quarterly observations) to test the tax smoothing hypothesis (TSH) by performing random walk, unit root, cointegration and Granger causality tests. The overall tax rate and permanent expenditures are found to be cointegrated only if structural breaks in the data are accounted for, and permanent expenditures Granger-cause the overall tax rate. An auxiliary finding is that the tax rate based on revenues from oil and gas exports are not found to be cointegrated with permanent expenditures, and permanent expenditures do not Granger-cause this rate. These results are interpreted as evidence in support of TSH, because (rephrasing Barro) the finding that a particular category of taxation is not cointegrated with permanent expenditures would not invalidate the central thesis. Overall, the Russian government seems has pursued tax smoothing. Permanent changes in expenditures were followed by tax rate revisions with transitory fiscal imbalances covered by combination of borrowed funds and oil and gas revenues. Lower level of cointegration seems to show that the Russian economy has incurred losses due to incomplete and inconsistent tax smoothing.
Keywords: excess burden of taxation, tax smoothing, cointegration, structural breaks
JEL: H60, H62, H63
For citation: Alekhin B.I. Tax Smoothing in Russia. Financial Journal, 2020, vol. 12, no. 2, pp. 9–24 (In Russ.). DOI: 10.31107/2075-1990-2020-2-9-24.

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Zhanna A. Mingaleva, Yurii V. Starkov
The System of Emission Taxation Analyzed: An Institutional Approach, p. 25-38
Abstract
Environmental regulation, designed to reduce environmental pollution and improve the climate, is currently actively applied in all economically developed countries of the world. Various tools have been developed to influence economic and social entities in order to reduce emissions of pollutants into the environment. Emission taxation and trade in emission permits are basic tools of environmental regulation. These tools have different effects both on success in implementing international and national environmental policies, and on the degree to which businesses and households are involved in the implementation of the whole range of measures to reduce harmful emissions into the atmosphere and protect the environment. This article analyzes the features and practical applicability of the tax instrument for harmful emissions, and examines its strengths and weaknesses taking into account the influence of political, social, and economic factors. Institutional and comparative analysis are the main research methods used. The result of the study is the conclusion about the varying degrees of effectiveness of applying tax mechanisms for harmful emissions at the national and international levels as well as in relation to various sources of emissions. It is shown that, due to differences in national legislation and basic economic development conditions, the mechanism of taxation of harmful emissions in individual countries cannot succeed in achieving the results of pollution reduction and normal development of environmental mechanisms planned in international documents. Nevertheless, in the current context, the system of emission taxation remains more effective than trade in emissions within individual countries, and is applied more widely throughout the world than the mechanism of trade in permits. In addition, the potential of the taxation mechanism has not yet been fully utilized.
Keywords: “Green” taxes, harmful emissions, greenhouse effect, internalization of externalities, tax rates, pollution sources, emission taxation
JEL: Q54, Q56, Q58, Q52
Acknowledgements: The present research has been carried out as per the target on fulfilment of government contractual work in the field of scientific activities within the fundamental part of a state task of the Ministry of Education and Science of the Russian Federation to Perm National Research Polytechnic University (topic 0751-2020-0026).
For citation: Mingaleva Zh.A., Starkov Yu.V. The System of Emission Taxation Analyzed: An Institutional Approach. Financial Journal, 2020, vol. 12, no. 2, pp. 25–38 (In Russ.), DOI: 10.31107/2075-1990- 2020-2-25-38.

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Mariya A. Shchepeleva
Modeling the Balance Sheet Channel of Monetary Transmission in Russia, p. 39-56
Abstract
Topicality. After the global financial crisis of 2008–2009, research on the impact of financial variables on the real sector has intensified. According to the theory of monetary transmission, a change in the short-term interest rate affects the volume of investment in both direct and indirect ways, through a change in the balance sheet indicators of creditors (bank lending channel) and borrowers (balance sheet channel of monetary transmission). Analysis of various transmission channels provides relevant information for the regulator, allowing for a more accurate estimation of monetary policy’s consequences. This paper aims to assess the extent to which the balance sheet channel was at work in Russia throughout 2010–2017. By applying both micro- (panel dataset) and macroapproaches (time series), we establish that there are certain signs of the balance sheet channel in the Russian economy, though it is not fully compatible with the traditional transmission chain. Our analysis provides evidence that there is a statistically significant link between short-term interest rate and investment. Still, we do not find robust empirical support for the remaining linkages in the transmission chain. Further research is needed to provide more precise quantitative estimates of the linkages within the balance sheet channel and compare its significance with other channels of monetary policy transmission.
Keywords: balance sheet channel, financial stress, monetary transmission, panel VAR, Bayesian VAR
JEL: E52, E58
For citation: Shchepeleva M.A. Modeling the Balance Sheet Channel of Monetary Transmission in Russia. Financial Journal, 2020, vol. 12, no. 2, pp. 39–56 (In Russ.). DOI: 10.31107/2075-1990- 2020-2-39-56.

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Darya V. Gorokhova
Public Procurement in the Russian Federation: Retrospective and Development, p. 57-68
Abstract
The sphere of state and municipal procurement is one of the most dynamically developing areas of state regulation. Since 2013, 46 Federal laws have been adopted, which amended Federal Law No. 44-FZ, and more than 100 by-laws. Significant changes in the sphere of state and municipal procurement related to the requirements for the implementation of national projects were made in 2019. It is obvious that the norms of legal regulation of the 44-FZ require systematization, a critical look and development of further directions for improvement. To this end, the article discusses the innovations of Federal Law 44-FZ and its by-laws in the relations and development and offers directions for further improvement of the Law. Legal, comparative and statistical methods of analysis were used in writing the article. The results of the study show that the current system of state and municipal procurement does not fully meet the requirements of efficiency, is not convenient for supplier organizations, and requires further procedural and personnel optimization. Proposals for further development are given in these areas.
Keywords: public procurement, 44-FZ, procurement efficiency, contract system, procurement legislation
JEL: H80, H57
For citation: Gorokhova D.V. Public Procurement in the Russian Federation: Retrospective and Development. Financial Journal, 2020, vol. 12, no. 2, pp. 57–68 (In Russ.). DOI: 10.31107/2075- 1990-2020-2-57-68.

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Natalia S. Matveeva
State Financial Control: International Experience (Russian, English), p. 69-95
Abstract
Financial control is a major part of the financial management system. Its increasing importance in the contemporary world is reflected in the Lima Declaration of Guidelines on Auditing Precepts, according to which financial control is an integral component of public finance management. The relevance of the topic is also associated with the strengthening of the role of financial control in developed countries and the search for ways to increase the effectiveness of its implementation. The article aims to identify the main development trends of state financial control in advanced countries and to analyze the standardization process. Despite the fact that the system of state financial control is based on different principles in different countries, depending on the prevailing historical, economic and regulatory traditions of a particular country, further directions for the development of this sphere are determined by general trends toward decentralization of control and the standardization of control activities. In addition, the current level of development of state financial control in the Russian Federation and the possibility of adapting international experience in our country in order to increase the effectiveness of financial control are described. In this article, the analysis of foreign experience has been carried out at three levels: general control over public finance; government and parliamentary control; and internal control and internal audit as special areas of financial control. In regards to standardization, the standards of external state control have been found to be formed and approved by the national control and accounting bodies of the country, taking into account the requirements of INTOSAI standards. At the same time, national standards include legally established features of the state financial control organization in a given country as well as the national practice of conducting state audit. Requirements for the organization and implementation of internal financial control can be set by supreme audit bodies or ministries of finance, whereas requirements to organize and carry out internal financial audit are often provided by law.
Keywords: state financial control, financial management system, Supreme Audit Institution, internal control, internal audit, regulatory authorities, international experience
JEL: E62, H11, H83
For citation: Matveeva N.S. State Financial Control: International Experience. Financial Journal, 2020, vol. 12, no. 2, pp. 69–95 (In Russ.). DOI: 10.31107/2075-1990-2020-2-69-95.

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Tatyana G. Arbatskaya
Importance of Inventory in Ensuring Accurate Presentation of Financial Reporting by Public Sector Entities, p. 96-110
Abstract
The development of accounting for public sector entities and its convergence with public sector IFRS pose new methodical and methodological problems. Inventory is essential to ensure faithful representation of financial reports provided to users. This confirms the relevance of the study. The article contains a theoretical study of inventory in the context of implementation of federal standards for accounting in public finance. The paper studies the relationship of inventory with other elements of the accounting method as well as accounting procedures: recognition, classification, evaluation, adjustment of estimates, presentation and disclosure of information in financial reports, and confirmation of reporting reliability made by an independent entity. In addition, the study has established the effect of inventory on the achievement of qualitative characteristics of financial reports to increase its usefulness to users. Since information requests by users change under the influence of external and internal environmental conditions, an inventory should confirm not only the recognition and classification of the object, but also its estimate. It is concluded that it is advisable to disclose information on the valuation of objects in financial statements at both actual and fair values. This would ensure the control function of accounting and strengthen its information function. The results obtained by the author can be used for further development of regulation of accounting in public finance.
Keywords: public sector entities, financial reports, inventory, faithful representation, qualitative characteristics of financial reports, estimate, impairment, fair value
JEL: M41
For citation: Arbatskaya T.G. Importance of Inventory in Ensuring Accurate Presentation of Financial Reporting by Public Sector Entities. Financial Journal, 2020, vol. 12, no. 2, pp. 96–110 (In Russ.). DOI: 10.31107/2075-1990-2020-2-96-110.

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Makar I. Kudelich
Legal Issues of Redress in Subrogation, p. 111-119
Abstract
Due to the growing needs of compensation and protection of insured persons’ rights, improving the mechanisms of legal regulation of subrogation are becoming particularly urgent. The purpose of this article is to identify and systematize currently existing basic theoretical and scientific legal problems of subrogation. The results of the study include proposals for legal framework improvement regarding problems associated with the insurance of civil liability and the risk of losses from business activities, with the assignment and offset of claims in subrogation, with the ratio of the size of the insurance payment and subrogation claims as well as subrogation and reinsurance. In addition, the findings can be used to improve the norms of Russian civil law in order to eliminate the conflict of rules related to persons responsible for losses and persons responsible for the occurrence of an insured event, as well as to establish a ban on the use of subrogation in relation to the insured and his relatives.
Keywords: subrogation, insurance, compensation, legal framework
JEL: G22
For citation: Kudelich M.I. Legal Issues of Redress in Subrogation. Financial Journal, 2020, vol. 12, no. 2, pp. 111–119 (In Russ.). DOI: 10.31107/2075-1990-2020-2-111-119.

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Vyacheslav N. Ovchinnikov
Nobel Prize in Economic Sciences 2019: Poverty Alleviation and Experiments in Development Economics, p. 120-131
Abstract
In this paper, the results of empirical studies by Nobel Prize laureates in Economic Sciences 2019 Michael Kremer, Abhijit Banerjee and Esther Duflo are discussed. Field experiments in education and healthcare systems as well as in the financial and technological areas made it possible to evaluate differently the effectiveness of traditional instruments of economic and social policy in poor countries, offering new, better practices and reforms aimed at poverty alleviation. In addition to the relevance of the findings in politics, the experiments by the laureates provided development economics with powerful analytical and methodological tools, forming the foundation for future academic investigations in this branch of economics.
Keywords: Nobel Prize, laureates, development economics, experiment, poverty, poor countries
JEL: O10, O12, O15
For citation: Ovchinnikov V.N. Nobel Prize in Economic Sciences 2019: Poverty Alleviation and Experi- ments in Development Economics. Financial Journal, 2020, vol. 12, no. 2, pp. 120–131 (In Russ.). DOI: 10.31107/2075-1990-2020-2-120-131.

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Scientific periodical

ISSN 2658-5332