Center of Advanced Economic Research in the Academy of Sciences of the Republic of Tatarstan

4 February 2014, Tuesday

World Applied Sciences Journal 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

ISSN 1818-4952

DOI: 10.5829/idosi.wasj.2013.27.elelc.62

Corresponding Author: Safiullin, Institute of Economics and Finance of Kazan (Volga region) Federal University,

Kremlevskaya, 18, 420008, Kazan, Russia.

299

About Assessment of Budgetary Policy Efficiency of Municipalities

M.R. S 1 afiullin, 1G.G. Derzayeva and 2L.A. Elshin

1Institute of Economics and Finance of Kazan

(Volga region) Federal University, Kazan, Russia

2Department of Macroexamination and Economics of

Growth of State Financed Organization SFO "Center of Advanced Economic

Research" of Academy of the Republic of Tatarstan, Kazan, Russia

Submitted: Oct 30, 2013; Accepted: Dec 18, 2013; Published: Dec 20, 2013

Abstract: In the article there are systematized the existing assessment techniques of the budgetary policy

efficiency at the budget of a different level from the point of view of their applicability to municipalities and

also come to light their advantages and the shortcomings, allowing to define conditions of their use in practice.

A method of an assessment of budgetary policy efficiency, based on matrix approach is proposed in this article.

Assessment of budgetary policy of municipalities of the Republic of Tatarstan which include large cities is

carried out according to this method. On the OX axis in this case it is offered to postpone the given indicator

of the budget expenses to the territory per capita, on the OY axis - an integrated assessment of the population

life quality on the territory, reflecting social development. According to the results of the carried-out analysis

there are drawn conclusions on the development directions of the budgetary policy in the largest municipal

regions of the Republic of Tatarstan.

Key words: Budgetary policy Municipality Efficiency Method

INTRODUCTION realization of budgetary policy, to reveal their own internal

The centuries-old history of development of population welfare growth. Works of such authors as

humanity led to the fact, that functioning of modern A.M. Alexandrov, A.A. Babaytsev, E.A. Voznesensky, V.

society is provided by the state which, in turn, has M. Vlasova, O. V. Vrublevskaya, O. V. Goncharuk, L.A.

developed such a mechanism as a budgetary policy for Drobozina, A.M. Kovalyova, T.V. Silvestrova, E.V.

ensuring its existence. Russian statehood involves Shipilova are aimed at achieving these goals. The most

three-level system of a budgetary policy: state, region, various methods of assessment of budgetary policy

municipality. It is obvious that society functioning at the efficiency of municipal authority, regional and

level of municipality which is provided with local budget government bodies are presented in their works, however,

is the closest to daily interests of the majority of citizens the majority of them are often subjected to criticism and

of the Russian Federation. The budgetary system of have no practical application. Therefore, in our opinion, it

Russia constantly is in conditions of reforming and is necessary to analyze the most frequent methods in

transformations that generates a lot of problems and modern economic literature. We will realize it in Table 1,

contradictions. And life of each citizen of the Russian having systematized methods by efficiency criterion.

Federation goes through "here and now". Therefore it is As can be seen from Table 1, each of the presented

necessary to help municipalities to provide complete methods has its essential advantages following from

satisfaction of interests of the population living in its accurate and logical justification of chosen efficiency

territory, through the existing mechanism of the budgetary criterion and disadvantages arising from connection with

policy. For this purpose, in our opinion, it is necessary to inability to cover all group of factors, influencing on

estimate efficiency of mechanisms of formation and budgetary policy efficiency of municipality. In our

development possibilities, to create conditions for

World Appl. Sci. J., 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

300

Table 1: Grouping methods of budgetary policy efficiency assessment by efficiency criterion

Efficiency criteria Authors Advantages and disadvantages

Collection activities of budget receipts, Babaitsev A.A. [1] Calculation of these activities allows to reveal the dependence on

budget obligations implementation, Kovaleva T.M. [2] superior budgets that has developed in a municipality, self-financing

budget deficit and public debt management degree and thus allows to judge external budgetary policy efficiency

of municipality. Comparison of these data on different municipalities

allows to draw a conclusion on the most successful of them and to adopt

their practices of carrying out the budgetary policy. However, using only

these activities limits efficiency assessment very much.

Maximum coverage budgetary process Saint-Petersburg Center for This method covers all range of problems of municipality, beginning

problems: formation, discussions and Humanities and Political from analysis of revenues through tax and budgetary legislation, to

budget performance at regional and Studies "Strategy" [3] analysis of each element in supply. However it is too bulky for

municipal level application and demands huge human resources when using; doesn't

consider municipality efficiency assessment from macroeconomic positions.

Values of conventional budget coefficients: Method of efficiency assessment These activities in a complex, in general, describe the situation in

ratio of gratuitous transfers and earned of municipalities activity of the municipality in the field of finance. However there are a number of problems:

revenue; budgetary effectiveness of Novosibirsk region [4] what kind of activities should be included in calculation of coefficients, how

territories; budgetary debt; budgetary to define what one or another coefficient means, how to provide comparability

cover and supply of activities.

Activity efficiency of each budgetary Silvestrova T.V. [5] This method doesn't touch a situation as a whole: result, costs of its

institution separately. achievement is specified, but the ratio of costs to results in "efficiency"

assessment calculations isn't analyzed.

Degree of reliability of providing Shipilova E. V. [6] This method allows to judge how the municipality used its financial

information on budget performance, resources, whether there were deviations in targeted draft on funds. In this

compliance with the current legislation case, checking sometimes demands big expenses, than possible violations.

of operations on management of financial Using one scheme in different municipalities isn't always justified, as all

and economic activity of organization. of them significantly differ as in social and economic, historical position and

Efficiency and expediency of administrative in security with personnel resources, budgetary funds, etc.

decisions making and scarce resources using

Productivity activities-activities of final Berezdivina E.V. [7] Not all activities are applicable for a municipality. Some of them, indeed,

effects, activities of direct results and reflect a state of budgetary policy, with a direct relation to finance, others

resources use activities have more descriptive character, statistical information collected in section

of subjects of the Russian Federation or in the whole the state is necessary

for calculation of the third.

opinion, the main disadvantage of the majority of methods results with use of funds determined by the budget. It is

is their relative detachment from taking into account natural that "funds" of municipality are local budget costs

budgetary policy impact on life quality of population, as and what about "specified results"? In our opinion, it is

considering dispositions of chapter 3 of the Federal Law purport of municipality activity - improvement life quality

of 06.10.2003 N 131-FL [8], purport of existence of of population. Therefore for obvious display positions of

municipalities consists, including providing a decent territory among regions competitors and definition of

standard of living to its population as well. priority shifts direction when developing budget

Main Part: Taking into account all above, we offer a new of abscissa will reflect budget costs, expressed through

method of assessment, allowing to estimate budgetary the given indicator of budget costs the per capita and

policy influence on social development of municipalities. ordinate axis-social development, expressed through

As efficiency criterion we suggest to use equilibration of integral index of life quality of population (Fig. 1).

local government social development and costs of its Let’s consider a method suggested by us on the

implementation. In our opinion, this efficiency criterion example of municipalities of the Republic of Tatarstan

follows from Article 34 of the Budgetary Code of the which include large cities, in 2009 - 2012.

Russian Federation which contains a definition of "the At the first stage, we transform budget costs per

principle of efficiency and economy of budgetary funds", capita in summation term into relative indicators,

consisting in need of achievement specified results using calculating the given indicator of budget costs using

of the least amount of money or achievement the best formula 1, for possibility to display budget costs of

territories we suggest using matrix approach. Where axis

World Appl. Sci. J., 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

301

Fig. 1: Budget costs influence on social development

Table 2: Local budget costs of municipalities of the Republic of Tatarstan which include large cities, in 2009-2012. Thousand rubles

Budget Budget costs on Budget Budget costs on Budget costs on Budget costs

Municipality of the costs on physical culture and costs on culture,cinematography housing and on defense,politics, Total

Republic of Tatarstan Year health care sports development education and mass media communal services national questions, ect. costs

Aznakaevsky MR [9] 2009 91 14056 378424 43257 51157 272321 759215

2010 77702 17422 443285 27204 104154 289123 881188

2011 64262 20789 508146 11150 157151 305924 1003160

2012 50821 24155 573007 4903 210148 322726 1125132

Almetyevsky MR [10] 2009 142775 21906 918007 75102 209029 836388 2060432

2010 176377 14938 1159769 74870 622312 962521 2834410

2011 209980 7970 1401530 74638 1035595 1088655 3608388

2012 243583 1002 1643291 74406 1448878 1214789 4382366

Yelabuzhsky MR [11] 2009 208014 137652 434538 132366 153977 758457 1616991

2010 187834 248012 533055 44537 262791 813804 1902199

2011 167654 358371 631572 131256 371606 694602 2187407

2012 147474 468731 730089 125698 480420 667677 2472615

Zelenodolsky MR [12] 2009 120415 5738 485097 37384 77001 382726 987946

2010 254342 16091 758743 65284 352399 578512 1771029

2011 388269 26444 1032389 93184 627796 774299 2554113

2012 522195 36797 1306035 121085 903194 970085 3337196

Leninogorsky MR [13] 2009 126319 37187 393150 52645 86132 309261 878375

2010 124625 25635 440744 40368 184329 356323 1047399

2011 122932 14082 488339 28092 282527 403384 1216423

2012 121238 2529 535933 15815 380724 450446 1385448

Niznekamsky MR [14] 2009 254835 5632 1281691 59990 189869 887458 2419008

2010 265317 67737 1650389 61227 672430 1434251 3886034

2011 275799 5463 2019087 62464 1154991 2116518 5353060

2012 286281 67737 2387785 63701 1637552 2663311 6820086

Chistopolsky MR [15] 2009 105108 3767 386693 31594 124937 309571 856561

2010 156282 5086 527749 27299 212300 358301 1130735

2011 207455 6405 668805 23004 299663 407032 1404910

2012 258629 7725 809861 18710 387026 455763 1679084

Kazan city 2009 1716192 466830 4965372 473714 3715864 5186051 14807830

municipality [16] 2010 1510317 1345853 6644056 327901 4266492 5776450 18360752

2011 1304442 2224876 8322741 182087 4817121 6366849 21913673

2012 1098566 3103898 10001425 36274 5367750 6957247 25466595

Naberezhnye Chelny 2009 412196 61505 2083800 116352 694656 1620221 4576534

city municipality [17] 2010 391144 33730 2673165 113801 1383146 1614141 5817983

2011 370091 5956 3262529 111249 2071636 1608061 7059431

2012 349038 21819 3851893 108698 2760126 1601981 8300879

municipalities with different population on one matrix

(Table 2). Let’s take as base activities maximum and Xn = (XN-Xmin) /(Xmax-Xmin), (1)

minimum activities of territorial entities of RT for 2009.

World Appl. Sci. J., 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

302

Table 3: Given indicators of budget costs per capita of municipalities of the Republic of Tatarstan which include large cities, in 2009-2012.

Municipality of the Given indicator of Municipality of the Given indicator of

Republic of Tatarstan Year budget costs per capita Republic of Tatarstan Year budget costs per capita

Aznakaevsky MR 2009 0,2759 Niznekamsky MR 2011 0,1451

2010 0,3705 2012 0,4156

2011 0,4651 2009 0,6861

2012 0,4446 2010 0,4987

Almetyevsky MR 2009 0,2181 Chistopolsky MR 2011 0,2138

2010 0,4115 2012 0,3797

2011 0,6050 2009 0,5456

2012 0,4938 2010 0,4557

Yelabuzhsky MR 2009 0,6814 Kazan city municipality 2011 0,3403

2010 0,8460 2012 0,4908

2011 0,7896 2009 0,6414

2012 0,9268 2010 0,5890

Zelenodolsky MR 2009 0,0000 Naberezhnye Chelny city municipality 2011 0,1392

2010 0,2406 2012 0,2569

2011 0,4811 2009 0,3745

2012 0,2887 2010 0,3082

Leninogorsky MR 2009 0,1821 Leninogorsky MR 2011 0,3699

2010 0,2760 2012 0,3312

where: differently at various times by different authors. For the

Xn - Given indicator of budget costs per capita during calculation of integral indicator of life quality of

relevant period; population developed in the Republic of Tatarstan by

XN - Absolute value of corresponding budget costs per Akhmadiyeva G.G. and Sultanova D. Sh. [18]. This choice

capita during the relevant period; is motivated by the fact that this method of calculation

Xmin - Minimum activity of corresponding budget considers a wide range of social development factors and

costs per capita in all territorial entities of the allows to display the result for comparison on our

Republic of Tatarstan for the base period; proposed matrix "Social development/Budget costs".

Xmax - Maximum activity of corresponding budget According to this method for calculating an integral

costs per capita in all territorial entities of the indicator of life quality of population indicators

Republic of Tatarstan for the base period. characterizing: standard of living, health situation, level of

By carrying out the above calculations for the total quality, housing availability, level of cultural sphere

value of budget costs of municipalities of the Republic of development, level of ecological safety, level of transport

Tatarstan which include large cities, in 2009 - 2012, we infrastructure development, state of housing and

have the following results (Table 3). communal services sphere are used. Relative indicator is

The second stage is to determine an integral index of determined on each absolute indicator by the formula

life quality of studied municipalities’ population. similar to formula 1. Then the relative indicator is

Using national income per capita, a share of costs on determined by each above-mentioned group by an

food in general household costs, relative mortality rate, arithmetic mean. The integral indicator of life quality is

average life expectancy of population, indicator of free defined by adding received values with weighting

time and etc. were suggested as an integral indicator of coefficients: 0,2 for groups: health situation, standard of

life quality of population at different times. Later attempts living, education level; 0,1 for other groups. Akhmadiyeva

to develop complex integral life quality indicators of G.G. and Sultanova D. Sh. carried out the analysis of

territories were made. "Intensity indicator" offered by social and economic development of municipalities in 2009

Russian statisticians, in the international statistical - 2012 [18] where calculation of integral indicator of life

practice - complex index proposed by Research Institute quality in corresponding municipalities was given. Let's

of Social Development of the United Nations can be an use the obtained integral indicators of life quality of

example, in the United States of America simplified analyzed municipalities’ population. These data are given

approach to calculation of integral indicator of life in Table 4 [18].

quality by means of poverty index is actively applied. According to Tables 3 and 4 let’s make a matrix

Thus, integral indicator of life quality was defined "Social development/ budget costs".

purpose of our research the most suitable calculation is

physical culture and sports development, education

World Appl. Sci. J., 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

303

Table 4: Social development indicators of municipalities of the Republic of Tatarstan, which include large cities, in 2009-2012

Municipality of the Integral indicator of Municipality of the Integral indicator of life

Republic of Tatarstan Year life quality of population Republic of Tatarstan Year quality of population

Aznakaevsky MR 2009 0,5087 Niznekamsky MR 2009 0,5259

2010 0,5383 2010 0,5166

2011 0,5230 2011 0,5314

2012 0,5947 2012 0,6551

Almetyevsky MR 2009 0,5516 Chistopolsky MR 2009 0,3950

2010 0,5643 2010 0,4155

2011 0,5461 2011 0,3834

2012 0,6601 2012 0,4863

Yelabuzhsky MR 2009 0,4787 Kazan city municipality 2009 0,5122

2010 0,7162 2010 0,6351

2011 0,5091 2011 0,5449

2012 0,7642 2012 0,6180

Zelenodolsky MR 2009 0,3670 Naberezhnye Chelny city municipality 2009 0,5548

2010 0,3668 2010 0,5661

2011 0,3340 2011 0,5459

2012 0,4594 2012 0,6496

Leninogorsky MR 2009 0,4548 Leninogorsky MR 2011 0,4378

2010 0,4687 2012 0,5906

Fig. 2: Influence of budget costs on social development (life quality of population) of municipalities of the Republic of

Tatarstan which include large cities, in 2009-2012.

CONCLUSION A special emphasis should be made on Yelabuzhsky

By the results of the proposed method applying, it is jumps of life quality indicator of population both towards

possible to single out municipalities which budgetary increase and towards decrease while movement of budget

policy for the researching period, in our opinion, had costs indicator in this municipality was uniform towards

strategic advantages and led to the best results increase. Also it is necessary to mark out Leninogorsky

(improvement of life quality). Figure 2 shows that municipality where rather small budget costs led to

essential change in budget costs was in Zelenodolsky, significant growth of integral indicator of life quality of

Nizhnekamsky, Almetyevsky, Chistopolsky population. It was turned out that its budgetary policy

municipalities, at the same time life quality significantly was the most effective among researched municipalities.

increased only in Zelenodolsky, Nizhnekamsky Interesting dynamics of budget costs indicators and life

municipalities. In Almetyevsky and Chistopolsky quality of population is observed in Municipality "Urban

municipalities change of life quality was less considerable. District Naberezhnye Chelny" and in Municipality "Urban

municipal region where it’s interesting to observe sharp

World Appl. Sci. J., 27 (Education, Law, Economics, Language and Communication): 299-304, 2013

304

District Kazan". There wasn't essential change of integral 4. Analysis of interbudgetary relations in public

indicator of life quality and budget costs in other interests (On the example of municipalities of

researched municipalities. Thus, budgetary policy Novosibirsk region). Date Views 01.12.2013

efficiency in these municipalities is the following: in www.budgetrf.ru/.

Municipality "Urban District Naberezhnye Chelny", 5. Silvestrova, T.V., 2012. Criteria for evaluating

Municipality "Yelabuga MR", Municipality "Chistopolsky budgetary funds use efficiency at modern model of

MR" there are more changes in costs, than in social budgetary resources management. Actual issues of

development; the changes are unidirectional, policy is accounting and taxation, 8: 12-25.

effective. Meanwhile the greatest changes are in 6. Shipilova, E.V., 2013. Priorities in assessment of

Municipality "Yelabuzhsky MR". As for Municipality budget costs efficiency during external control of

"Nizhnekamsky MR", Municipality "Aznakayevsky regional budget. Date Views 01.12.2013

MR"-there are more changes in costs, than in social www.openbudget.karelia.ru/.

development; the changes are multidirectional. 7. Berezdivina, E.V., 2013. Subject productivity

The budgetary policy isn't effective, improvements are indicators system of budget planning.-Date Views

required. These are large municipalities with a rather big 01.12.2013 www.politanaliz.ru/art_list_90.html/.

population, they have an important strategic importance 8. The Law of the Russian Federation "About general

for development of the Republic of Tatarstan as a whole, principles of local self-government organization in

therefore development and improvement of their the Russian Federation" of 06.10.2003

budgetary policy should be an example for other 9. Council Decision of Aznakayevsk municipal region

municipalities. "About the budget of the Aznakayevsky municipal

Result: Thus, the proposed method made it possible to 10. Council Decision of Almetyevsk municipal region

reveal influence of budget costs on social development of "About the budget of the Almetyevsky municipal

municipalities. Using these results, it is possible region for 2009, 2010, 2011, 2012".

optimally to define directions of development of the 11. Council Decision of Yelabuga municipal region

territories, necessary for their effective functioning and "About the budget of the Yelabuga municipal region

simultaneous providing a high level of life quality of for 2009, 2010, 2011, 2012".

population. We suggest carrying out an assessment of 12. Council Decision of Zelenodolsk municipal region

budgetary policy efficiency of municipalities, using this "About the budget of the Zelenodolsk municipal

technique. The advantage of this method consists in region for 2009, 2010, 2011, 2012".

comparison of budget costs of municipality with life 13. Council Decision of Leninogorsk municipal region

quality of population of the same territory. In our opinion, "About the budget of the Leninogorsk municipal

such approach to assessment of budgetary policy region for 2009, 2010, 2011, 2012".

efficiency will promote the best reflection of our proposed 14. Council Decision of Nizhnekamsk municipal region

efficiency criterion as an extent of social and economic "About the budget of the Nizhnekamsk municipal

aims achievement of municipality while minimizing amount region for 2009, 2010, 2011, 2012".

of funds. 15. Council Decision of Chistopol municipal region

REFERENCES for 2009, 2010, 2011, 2012".

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Federation subject and municipality. Volgograd 17. Council Decision of urban district Kazan "About the

Press, pp: 191. budget of the urban district Kazan for 2009, 2010,

2. Kovalyova, T.M., 2012. The budgetary policy of 2011, 2012".

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Saratov Press, pp: 418. Strategic management of territorial economic systems.

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"About the budget of the Chistopol municipal region

16. Council Decision of urban district Naberezhnye

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