WCER Regional Peculiarities of the Municipal Reform in the Period
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Consortium for Economic Policy Research and Advice WCER Canadian Association Institute Working Academy International of Universities and for the Economy Center of National Development Colleges in Transition for Economic Economy Agency of Canada Reform Regional Peculiarities of the Municipal Reform in the Period of Transition Moscow IET 2007 UDC 352 BBC 66.3(2Рос),124 R35 Regional Peculiarities of the Municipal Reform in the Period of Transition / Consortium for Economic Policy Research and Advice – Moscow: IET, 2007. – 267 p. : il. – ISBN 978-5-93255-233-9. Agency CIP RSL Authors: Forward, Conclusions, Chapter 1 – I. Starodubrovskaya (team leader); Chapter 2 – I. Starodubrovskaya, M. Slavgorodskaya, T. Letunova; Chapter 3 – I. Starodubrovskaya, M. Slavgorodskaya, N. Mironova, A Khrustalev; Attachment 1 – A Khrustalev; Attachment 2 – T. Letunova, M. Slavgorodskaya; Chapter 4 – H. Kitchen. Translated from the Russian by Anatoliy Filatov Page setting: Yudichev V. Organizational and financial issues related to the governance of municipalities were examined in this work with the aim to analyze regional peculiarities of municipal reform during transition period. Analysis was conducted with the help of budget statistics for the first half of 2006 and regional budgetary legis- lation, as well as with the help of the data received during research in the pilot regions and municipalities. JEL Classification: H11, H70, H77, К10 The research and the publication were undertaken in the framework of CE- PRA (Consortium for Economic Policy Research and Advice) project funded by the Canadian Agency for International Development (CIDA). UDC 352 BBC 66.3(2Рос),124 ISBN 978-5-93255-233-9 5, Gazetny per., Moscow, 125993 Russia Tel. (495) 629-67-36, Fax (495) 203-88-16 [email protected], http://www.iet.ru Contents Introduction ........................................................................................ 5 Chapter 1. Municipal Reform Costs............................................... 16 Chapter 2. Analysis of Costs of the Local Self-Governance Reform Based on Budget Statistics .......................................................................... 28 2.1. Factors Affecting Costs on Maintenance of Local Self-Governance Bodies ................................................... 28 2.2. Analysis of Costs on Maintenance of Local Self-Government Bodies Based on Budget Execution Reports of Constituent Entities of the Russian Federation and Municipal Entities in H1 2006 ................................................. 36 2.3. Analysis of Budget Costs on the Municipal Reform at the Constituent Entities of the Russian Federation Based on Budget Laws for 2005 and 2006 ........................................................................... 51 Chapter 3. Survey on Implementation of the Local Self-Government Reform in Specific Regions............................................................................ 55 3.1. Vologda Oblast......................................................................... 55 3.2. Tver Oblast............................................................................... 88 3.3. The Chuvash Republic ........................................................... 110 3.4. Orenburg Oblast..................................................................... 125 3.5. Chelyabinsk Oblast ................................................................ 138 3.6. Kaluga Oblast......................................................................... 154 3.7. Conclusions............................................................................ 161 Conclusion....................................................................................... 167 Appendix 1. Socio-Economic Standing at Regions and Areas Included into the Survey.............................................. 173 Appendix 2. Quantitative Analysis of Changes in Local Budget Costs on Local Self- Government Due to the Municipal Reform ................................. 187 Chapter 4. Variations in Municipal Government Structure: Can Russia Leam Anything from Canadian Experience?.......................................................... 209 4.1. Introduction............................................................................ 209 4.2. Structure of Municipal Government ...................................... 210 4.2.1. Unincorporated Communities....................................... 211 4.2.2. Incorporated Municipalities.......................................... 213 4.2.3. Structure........................................................................ 218 4.3. Structural Options .................................................................. 232 4.3.1. Criteria.......................................................................... 234 4.3.2. Two-Tier Structure ....................................................... 237 4.3.3. Large Single Tier Structure .......................................... 241 4.3.4. Smaller Single Tier Structure ....................................... 250 4.4. Are There Lessons for Russia?............................................... 258 4.5. Summary ................................................................................ 260 References ....................................................................................... 262 References for Capters 1–3 ........................................................... 262 Laws and Regulations for Capters 1–3 ......................................... 263 References for Сhapters 4 ............................................................. 265 Introduction The Federal Law 131-FZ was originally expected to take effect on January 1, 2006 almost simultaneously at all regions of Russia. However, the practice of preparation of a new municipal law for implementation has revealed a variety of practical implementation options of the munici- pal reform. Regional peculiarities have been playing a more significant role since the adoption of the Federal Law 129-FZ, which extended tran- sition to a full-scale introduction of the municipal reform till January 1, 2009 as well as provided the constituent entities of the Russian Federa- tion with a legal framework by delegating to them more authorities con- cerning the terms and guidelines the reform should follow. The initial year of implementation of the municipal reform showed that its regional peculiarities are governed by a series of formal and in- formal institutional factors. The following factors should be regarded as the formal ones: 1) peculiarities of the reform of the territorial principles of local self- government, which means how newly established urban/ rural settle- ments were organized, as well as the status granted to cities; 2) peculiarities of delimitation of the issues to be resolved at the local level and delegation of authorities to deal with these issues between the municipal area and the urban/ rural settlement: whether or not the authorities to deal with issues of local significance incidental to ur- ban/ rural settlements were delegated to the level of municipal areas within the framework of regional laws; how actively the practice of delegation of authorities concerning resolution of issues of local sig- nificance from urban/ rural settlements to municipal areas and vice versa is engaged; 3) organization of fiscal relations in urban/ rural settlements: whether local budgets are drafted at the settlement level or financed by the cost sheet principle? 4) organization of the system of intergovernmental fiscal relations in the region: whether fiscal capacity of municipal entities is leveled or the gap between revenues and expenditures is eventually financed? Which level do (regional or local) rural/ urban settlements receive fi- nancial aid from? 5) peculiarities of the development of the local self-government admini- stration system: whether it is the regional laws that regulate estab- lishment of a local self-government administration system in newly established municipal entities or such municipal entities may choose principles of establishment such local self-government administration system? The informal factors, which are as much important as the formal ones, are as follows: 1) how strict is regulation of the reform by using informal and adminis- trative methods at the regional level? Тo what extent regional rec- ommendations and model laws and regulations are found to be actu- ally mandatory in this respect? 2) how strictly and uniformly the delegation of authorities from rural/ urban settlements to municipal areas is enforced; 3) whether financial aid in the form of donations is virtually of non- special (not earmarked) or special (earmarked) nature? 4) at which level, settlement or regional, budget expenditures of rural/ urban settlements are virtually authorized? 5) whether or not regional government authorities are making efforts to establish an administrative vertical framework with municipal entities as part of it and regarding such municipal areas and rural/ urban set- tlements as subordinate within the administrative hierarchy? 6) to which extent regional government authorities are participating in the establishment of local self-government bodies in large cities. It is obvious that the results of different types of interaction between all of the considered factors have an impact on both quality and value of administration of the municipal entities themselves as well as volumes, quality and value of provision of municipal services to the general public. It is of most interest for any analyst to track