Financial Journal

p. 24-38

Authors: Polina V. Bakulina, Ksenia A. Kuzmina

This article aims at analyzing the People’s Republic of China’s sanctions policy. The authors put special emphasis on the review of the current Chinese legislation on countering foreign unilateral measures targeting China. The emergence of a legal anti-sanctions framework in China is a development of 2020–2021, driven by the growing number of sanctions against China imposed by the U.S. and its allies against the background of trade war and global strategic competition. At the official level, Beijing remains vocal in condemning unilateral and extraterritorial sanctions by certain countries as violations of international law. Despite that, even before the current large-scale confrontation with the U.S., Chinese policymakers have used restrictive measures against third countries, though they have been traditionally adopted in an informal and opaque manner. Those measures have mostly been used as retaliation for certain acts of other states viewed by China as threats to its sovereignty and territorial integrity, and they have been specifically refined to maximize the impact on the target country while minimizing the damage to the domestic economy. The growing number of anti-China sanctions by the U.S. and its allies based on special legal instruments prompted the PRC to follow suit and create its own framework for introducing countermeasures and blocking mechanisms, although their implementation procedures still largely remain intransparent. China’s first steps were to officially introduce individual restrictions, but the persisting confrontational trends in PRC’s relations with the West might bring about formal or informal broadening of Chinese restrictions to transnational corporations and sectors of economy and promote further formalization of sanctions regimes.

p. 52-66

Authors: Anastasia B. Likhacheva

Much of the academic debate about the consequences of sanctions has been focused on their direct impact or on collateral damage to the bilateral relationship between the issuer of sanctions and the target of sanctions, reflecting the understanding of sanctions as a foreign policy tool. However, an analysis of the Russian experience allows one to raise new questions about the role of sanctions instruments in international affairs. Of course, in the short term, the priority is a policy aimed at minimizing the risks of direct sanctions. Nevertheless, Russia has been under extensive US and EU sanctions for more than seven years, and began to face individual restrictions even earlier. In this regard, the analysis of sanctions reactions can clearly be transferred to the mid- and long-term plane. The analysis of the regulatory legal acts and particular regional and sectoral strategies of Moscow shows that the target countries have been rearranging their international priorities under the threat of further sanctions pressure, both formal and informal. Thus, sanctions are serving not only as a tool of punishment or deterrence, but also as a signaling function in a new meaning — not only demonstrating disapproval of the target country’s policy, but signaling that the planning of long-term development projects is associated with increased risks. Therefore, the complex consequences of sanctions go far beyond the immediate response of the target countries, which is reflected in the industry overview of Russian sanctions pressure adaptation strategies. A particular example of such a transformation, considered in this article, is the sanctions policy in the post-Soviet space—both on the part of individual countries of the region in relation to Russia, and in terms of countermeasures on the part of the Russian Federation.

p. 75-90

Authors: Julia A. Tarasova, Ekaterina S. Fevraleva

This work is devoted to creating a model which could predict bankruptcy of Russian insurance companies. The aim of the study is to build a model based on panel data; its final version should have a good predictive power. Said topic is relevant because the number of revoked licenses has changed a lot over the past few years — this situation may influence both insurance organizations and the population in a negative way. The paper reflects the main characteristics of bankruptcy as well as analyzes the bankruptcy prediction models which have been made by various authors since the 20th century. In the practical part of the study, an econometric analysis of the collected data was carried out and a logit model was built. The model’s predictive power was tested on a sample of insurers. In addition, a random forest algorithm and a binary classification tree algorithm were used. As a result, it was discovered that the volume of insurance premiums to net profit ratio, which could be calculated only for insurers, and financial stability coefficients influence insurance companies’ bankruptcy the most. Further research can be expanded by including new, more sophisticated methods, such as neural networks or boosting.

p. 110-121

Authors: Vera V. Levina

This paper discusses the various aspects of participatory budgeting as a regional practice. Using Tula region as the example, the author analyzes the problems associated with the selection of projects, the involvement of residents in the process of preparing projects, and the organization of financing. The study has mainly used general scientific methods of systems-structural and structural-functional analysis as well as comparative research. It is established that the consolidation of the participants’ interests is a prerequisite for the preparation and selection of a larger number of participatory projects. Reasons for the prevalence of educational projects and the institutional mechanisms of their preparation are shown. In addition, the article addresses the role of the residents’ interest in the implementation of projects as an intermediate link between their awareness and involvement. Based on the analysis, it is concluded that involvement management and budget planning optimization have a multidirectional effect on the modernization of proactive budgeting mechanisms. As a result, significant amounts of subsidies from regional budgets have been found to have an ambiguous effect on the efficiency of involving residents in the processes of proactive budgeting. Recommendations for improving regional practices of participatory budgeting are formulated; these include control of the number of participants in the preparation of projects and voting, more attention to mechanisms for coordinating the interests of participants in proactive budgeting, and modernization of the mechanism for distributing subsidies. The article proposes the optimal balance of citizen involvement in participatory budgeting and co-financing of their initiatives from municipal and regional budgets.