Financial Journal

p. 25-38

Authors: Zhanna A. Mingaleva, Yurii V. Starkov

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.

p. 57-68

Authors: Darya V. Gorokhova

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.

p. 96-110

Authors: Tatyana G. Arbatskaya

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.

p. 120-131

Authors: Vyacheslav N. Ovchinnikov

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.

p. 27-40

Authors: Andrei I. Kostin

The relevance of the topic is justified by the fact that program- and target-oriented management methods have become an essential part of modern public finance. They contribute to the implementation of one of the key principles in this area, namely the principle of socio-economic efficiency of expenditures. At the same time, the practice of program- and target-oriented financing is currently evolving, and its final, stable forms have not yet developed. There are a number of serious difficulties in the implementation of program–target methods, in particular those related to the problems of applying formalized procedures for constructing a hierarchy of goals, tasks, and activities as well as linking resource needs to them. With program- and target-oriented funding of science, these problems become even more acute due to qualitative heterogeneity of both direct results and social outcomes. The article analyzes the existing organization of targeted funding in the field of scientific research. In particular, the problems of linking priority areas in the development of science and technology in the Russian Federation to program documents are considered. Presented are the findings of the analysis of target indicators and changes in their values as well as budget allocations for civil science under state programs and national projects in the Russian Federation. It is concluded that, in the framework of civil science spending, the program–target method of managing public spending remains largely formal, and that strategic and program documents and statistical monitoring of activities in the field of education, science, innovation and information technologies are not coordinated by goal setting and priority areas. The author suggests applying a tool for reviewing budget expenditures in the field of R&D as one of the efficient ways to assess the effectiveness of state programs.

p. 58-67

Authors: Igor Yu. Arlashkin

Three basic methods are employed to assess the fiscal capacity of territories for fiscal equalization: the representative tax system method, the historical data method, and the macroeconomic indicator method. Each of these methods has its own advantages and disadvantages, while the historical data method is considered the most accurate in terms of approximation of the values of fiscal capacity to actual budget revenues. The aim of the article is to compare the accuracy of assessing Russian regions’ fiscal capacities through various methods, as well as by combining them, and to propose measures to change the current methodology for fiscal capacity assessment. The calculations presented in this article for the Russian regions for 2018 show that, in fact, the representative tax system and historical data methods have a comparable degree of accuracy, and the macroeconomic indicator method is only slightly inferior to them. At the same time, while assessing the fiscal capacity in regard to individual taxes, both the method of historical data and the method of representative tax system may have an advantage in the accuracy of the assessment, the method of macroeconomic indicators being inferior to them (except for the case of corporate income tax). As the author’s calculations show, it is possible to improve the accuracy of assessing regional fiscal capacity through the following measures: (1) not taking into account data for the current financial year, that is, taking into account data for only two reporting years; (2) not adjusting income tax and personal income tax fiscal capacity to the rate of tax revenue growth; (3) using the method of macroeconomic indicators for mineral extraction tax and other tax fiscal capacity.

p. 87-104

Authors: Yuri A. Danilov

The macroeconomic stabilization that took place in Russia has led to a partial transfer of household savings from bank deposits to the securities market. This process determines the relevance of creating institutions to minimize the non-market risks of small investors. As global experience shows, among such institutions, the most important one is the compensation fund. The article discusses projects for the creation of a compensation fund in Russia, previously proposed by the Bank of Russia and the National Association of Stock Market Participants (NAUFOR). The results of recalculating the forecast balance of the compensation fund are presented, based on the previously formulated prerequisites of NAUFOR, but also underpinned by the latest quantitative data, which have changed significantly over the past two years as a result of explosive growth of household investments in the securities market. It is shown that in the new conditions it is impossible to ensure the adequacy of financing of compensation funds on the basis of previously proposed sources. The author presents a new approach to the formation of a compensation fund in Russia, which takes into account not only the new Russian realities, but also the existing global experience in the field of creating compensation funds. In the framework of this approach, the author proposes expanding the list of financing sources for the compensation fund. The article provides forecast estimates of the fund balance and ratios of compensation fund adequacy, calculated on the basis of these proposals, which indicate that this model of the compensation fund is economically viable and could be implemented as soon as possible. Further prospects for the development of a national compensation system, which could include compensation funds operating in various segments of the financial market, are considered.

p. 117-130

Authors: Maria G. Girich, Antonina D. Levashenko, Alexandra A. Koval

The field of electronic commerce nowadays is actively developing and stimulating the use of cashless payments. At the same time, payments for goods and services purchased via the Internet may not always be expressed in financial terms. For example, in the case of non-monetary transactions consumers receive products (goods or services) in exchange for their personal data. At the current stage countries of the Organisation for Economic Co-operation and Development (OECD), in particular the United States and European Union member states, have been raising the issue of the possibility of applying consumer protection legislation to non-monetary transactions (when consumers acquire goods or services in exchange for their personal data), including the possibility to return goods or get a refund for a service by demanding personal data deletion. In Russia, the problem of personal data protection is not examined through the prism of consumer protection legislation. The present research methodology is based on methods of logical, systematic and comparative analysis. The purpose of this study is to analyze the application of consumer protection legislation with regard to regulation of consumer personal data in non-monetary transactions. Comparison of global trends with existing Russian legislation and development of regulation proposals for Russia are the main results of this study.

p. 27-42

Authors: Evgeny N. Timushev

The article discusses the federal tools to expand the relative (to the regional level) financial capacity of local budgets in Russia’s budgetary system. Local fiscal decentralization is generally viewed as favorable to local and regional economic development. Reversing the trend of diminishing local powers at the regional level enables unique growth-friendly actions inside broader fiscal policy measures. It has been established that the Ministry of Finance has the ability to shape the fiscal incentives of regional peers toward increasing local decentralization The likelihood of regional authorities taking appropriate actions can be increased if the federal intergovernmental policy measures already planned are implemented, specifically, equalization transfers, balancing grants and earmarked transfers (“subsidies”) are expanded, and the mechanisms of their allocation are upgraded. From the methodological perspective, the “share of local budgets in region-wide total collected tax revenues” has been found to be an unreliable indicator of local fiscal decentralization.

p. 57-69

Authors: Makar I. Kudelich

Over the past years, the Russian Federation has taken a number of measures aimed at developing existing legislation in order to create attractive, stable and transparent conditions for private investment in projects with state participation, on the one hand, and to reduce the financial burden on the budget system, on the other. Currently, the tools to provide investors with special legal regimes for carrying out economic activities (such as special economic zones, territories of priority social and economic development, industrial technology parks, clusters and industrial parks, special tax regimes, territorial development zones etc.) are sufficiently implemented in the system of Russian legislation and economic practice. However, it should be recognized that there are significant gaps in the use of internationally recognized instruments to assist investors in the framework of contractual relations. In other words, today, regarding supporting the implementation of investment projects with state participation, only the necessary institutional, but not contractual environment has been formed, the latter being an indispensable requirement for attracting private (including foreign) investors. In this regard, the article considers one of the key elements of the international practice in supporting the implementation of investment projects with state participation — a direct agreement with senior creditors, and also contains a comparative legal analysis of such practice with the Russian system of legal regulation. The article concludes that it is necessary to expand the possibilities of using direct agreements in investment projects with state participation in Russia, and formulates proposals to bring their provisions in line with the best international standards.

p. 83-95

Authors: Igor A. Yakovlev, Svetlana I. Nikulina

According to the 2030 Agenda for Sustainable Development, inclusive green growth is considered to be the pathway to sustainable development. The transition to a resource-efficient green economy is especially challenging for developing countries due to a huge funding gap to implement the Agenda. Governments can play a proactive role in this process by incorporating sustainability factors into national financial systems to channel capital flows into green projects. Indonesia has greatly advanced toward a more sustainable financial system. Its experience in this sphere is especially valuable for the Russian Federation, which is currently shaping its policy of financing sustainable development. The study aims to identify the key facets of Indonesia’s strategy for sustainable finance. The authors outline the major aspects of Indonesia’s action plan and examine its regulatory framework for sustainable finance, including the domestic green bond market. They also analyze Russia’s current initiatives to promote sustainable finance at the national level. The authors come to the conclusion that the Indonesian strategy for sustainable finance is distinguished by specific objectives and principles of sustainable finance closely tied to national development priorities; a clear-cut action plan with time-bound measures to create a conducive environment for sustainable finance; a comprehensive regulatory framework embracing the entire financial sector; a phased approach to the transition to sustainable financing; and strong regulatory support for financial institutions during the transition period.

p. 108-125

Authors: Nurilya K. Kuchukova, Lyazzat A. Talimova

The article is devoted to the study of investment opportunities of Kazakhstan for accelerated technological modernization of the economy, since in the new global reality, active innovative industrialization of the country is the most important priority of the new model of economic growth in the framework of the fourth industrial revolution. The article discusses ways to solve the problem of the lack of sufficient financial resources for a quality update of fixed assets of the industry. For the Republic of Kazakhstan, the most attractive sources of financing for industrial and innovative activities are foreign investments, the development of a guarantee system that will expand the possibilities of bank lending, as well as the use of syndicated lending and venture investment mechanisms. In addition, an important way to attract portfolio foreign investment in the country along with direct foreign investment is to develop the stock market, in particular, the Astana International Financial Center, which will facilitate the entry of large institutional and private investors into the Kazakhstani market. It is concluded that in order to attract potential investors to the Kazakhstan market, it is necessary first of all to reduce taxes, because currently the total tax rate in Kazakhstan is high. Along with this, it is necessary to introduce incentive incentives specifically for investment in the manufacturing sector, since at present the bulk of investments are in the extractive industry.

p. 21-36

Authors: Boris I. Alekhin

Sustainability of Russia’s fiscal policy in 1999–2018 was explored by applying Bohn’s test to 20 annual observations and 79 quarterly observations. Budget policy is sustainable as long as primary surpluses positively and significantly respond to changes in the debt-GDP ratio. The test revealed that in both samples the fiscal reaction is positive and significant for total and external debt ratios, and negative and significant for domestic debt ratio. So, overall Russia’s fiscal policy was sustainable in 1999–2018. Large revenues from oil and gas exports secured a modest budget surplus, on average, over the period, thus reducing the demand for borrowed funds and producing a very low domestic debt ratio. As Bohn notes, “an inefficiently low level of public debt” may explain why the test fails in certain economies.

p. 50-63

Authors: Victoria V. Priobrazhenskaya

Professional competency transformation in the digital economy development process is inextricably linked with the future profession configuration. The situation is complicated by uncertain profession prospects due to conflicting forecasts and the lack of comprehensive system solutions in this area. The research objective is to analyze the accounting development prospects based on the general neoclassical structural concept and to outline the directions for competencies development in each area of accounting: theory, practice, and methodology. To study the accounting profession prospects in terms of relevant digital economy options, we used the epistemology and science philosophy methodology, the concepts of economic theory, and political economy provisions. The main result is the provision on the rising value of accounting competencies influenced by the widespread use of digital technologies. This conclusion is based on the following factors. Descriptive methodology is consolidated at the national and international levels, as a result of which the value of professional judgment increases. Digital technologies reduce routine work and stimulate the development of creative accounting activities. This entails growth in professional judgment competence, which extends to the entire neoclassical scientific organization triad. In the theoretical scope, digital technologies stimulate competencies in the form of developed knowledge, providing a holistic view of economic relation patterns, and explaining the methods, techniques and rules for accounting process implementation. In the practical field, digitization produces digital skills development. Exemption from the routine accounting practice leads to labor process restructuring and an increase in the intellectual component and value of mental abilities. In the methodology field, knowledge at the junction of fundamental theoretical accounting issues with a simultaneous confident understanding of the digital economy functioning (as a whole and across its individual elements) is supposed to be in demand. The proposed systematic approach removes uncertainty and opens up accounting prospects, makes it possible to outline the directions of relevant specialist training in the field of mental digital economy reflection, and contributes to enhancing the accounting profession’s prestige.

p. 74-89

Authors: Anton I. Votinov, Samvel S. Lazaryan, Vyacheslav N. Ovchinnikov

The purpose of this study was to identify the factors of income inequality in Russia using RLMSdata (2009–2016). In this paper inequality refers to differentiation in equivalent household income, adjusted for the cost of the consumer basket in the regions of Russia. To solve the problem, we used regression decomposition of the inequality index. According to the results, such factors as “the share of children in households”, “the size of households” and “the share of non-working adults” had the largest positive contribution to the inequality index. The “region of residence” factor, which is usually considered as the key factor of inequality in Russia, had an equalizing effect. This is due to the fact that we analyzed differentiation in the standard of living. Indeed, we calculated the dependent variable of income, adjusted for the cost of the consumer basket in the relevant region. Thus, the level of inequality was not affected by the regional attribute, but rather by the differentiation of other significant factors of the regions. The obtained results can be used for a deeper study of the causes of changes in inequality.

p. 104-118

Authors: Ivan A. Belarev, Elena B. Starodubtseva

Nowadays, innovative business is looking for new ways of raising capital for its financing. More traditional sources of financing are not always available, or are quite expensive due to the high risk involved. However, they are being replaced by new financing instruments. One of these is the issuing of tokens, which are then placed on the stock exchange, thereby attracting the necessary capital in exchange for cryptocurrency. Despite the fact that ICO has appeared relatively recently, it has made it possible to attract a significant amount of money exceeding the volume of venture financing, which is a more traditional instrument of financing for innovative business. The purpose of this article is to analyze this financing instrument, and to identify problems and prospects for its development in the short term. The essence of the instrument in question has some similarities with IPO, although, in contradistinction to IPO, investors of ICO do not receive the right to participate in capital and the right to receive dividends. Entrepreneurs are also free from debt obligations. Herewith, the process of issuing tokens is accompanied by a kind of prospectus, and the offering takes place both on the stock exchange and on the over-the-counter market. The short period of existence of this instrument leads to a number of problems, among which the most significant one is the absence of unified regulation in terms of recognition and classification of tokens, licensing, evaluation, auditing etc. However, in the coming years, the demand for this form of financing will be increasing, as shown by econometric analysis.

p. 24-35

Authors: Lyudmila A. Kormishkina, Lyudmila P. Koroleva

The relevance of the study is caused by the fact that since 2013, the proportion of low-income families with two or more children has been growing against the background of reductions in fertility in the Russian Federation. The hypothesis of the study is based on the assumption that with growing excessive inequality and poverty of the population, the maternity capital loses the function of stimulating fertility and becomes the only way for low-income families with children to improve their financial situation. The objective of the study is to substantiate the need to improve the state of redistributive policies through providing the maternity capital for each newborn starting with the first child to reduce large family poverty and the reproduction of poverty in the next generations, and to improve the quality of social resources through maintaining the assigned purpose of the maternity capital (housing, education, and health). The article analyzes the actual expenditure of the State under the Maternity Capital Program for 2007–2017 and the projected expenditure with regard to the introduction of additional measures to support families with children from 2019. An estimate of the necessary expenses for paying the maternity capital for each child from the National Wealth Fund is given. For wealthy families, it has been proposed to use an indirect negative tax. The authors give recommendations for improving the procedure of providing the maternity capital for reducing the reproduction of poverty through guaranteeing minimum start conditions for each child. The implementation of the proposed conceptual approach should be carried out in conjunction with reforming the system of taxation of income and individual property, and changing the provision of the maternity capital and targeted social support for families based on an assessment of their needs.

p. 50-59

Authors: Galina E. Besstremyannaya

The paper contrasts the drivers of mergers and acquisitions in Russia and other countries. Using the results of CEO surveys and surveys of the participants of the M&A markets in Russia and globally, the author compares the most prevalent strategies for company growth and restructuring. The paper points to economic evidence that insufficient development of competition and various issues in corporate finance may be linked to a relatively low predominance of M&A deals in Russia. In particular, this relates to the lack of deals, aimed at acquiring assets of the target. At the same time, the data for the Russian M&A market in 2014–2018 indicates relatively high competition in the information technology, and a growth in the number and the total value of M&A deals in this sector. Additionally, the overall Russian M&A market demonstrates a decrease in the average deal value, and there is a steady fall in the share of the oil and gas sector.

p. 75-87

Authors: Elizaveta V. Anufrieva

A trend toward growing influence of macroeconomics on financial markets has been observed in the last few years. Publications of statistical information relative to macroeconomy can easily affect the prices of commodities and their derivatives on financial markets. As there is little research dedicated to developing countries’ markets, the subject of this study is the Russian financial market. The goal of this analysis is to estimate whether there is an impact of macroeconomic factors on the return of indices traded at Moscow Exchange. The length of the study period is 129 months, and a total of 12 macroeconomic variables (6 of them are related to the Russian economy and 6 to the world economy) are selected to explain the return of 4 indices. The chosen method of this study is principal component analysis. It is implemented for three groups of macroeconomic factors: domestic, foreign, and both factor groups at once. The results suggest that, indeed, there is some influence of macroeconomics on the return of indices traded at Moscow Exchange. More than 10% of all changes in return can be attributed to factors connected to the Russian economy. The explanatory power of all constructed models is also quite high.

p. 102-115

Authors: Nataliya G. Filatova

Development of the long-term investment market is a condition for the formation of the main factors of economic growth and successful implementation of long-term infrastructure projects in modern Russia. The role of bank lending for long-term investment projects is to increase against the background of the consequences of the economic crisis and budget deficit. The article presents bank performance indicators for financing of long-term investment (infrastructure) projects. The author draws a conclusion on the dominant position of banks with state participation in long-term lending. The article considers the factors affecting the tendency of banks to long-term lending. The author also analyzes the practical experience of large domestic banks’ participation in financing of long-term investment projects. Problems and credit risks of long-term investment projects are identified. In conclusion, the author formulates recommendations on the directions and tools to improve the system for assessing the credit risks of investment projects in commercial banks. It is recommended to supplement this system with indicators of the structure of long-term investments, profitability of permanent capital and stability of the loaner’s efficient operation, as well as to ensure additional consideration of risk factors. The author defines the measures to expand the practice of syndicated lending, improving the mechanism providing state guarantees, and developing tools for cooperation between the bank and the loaner as promising areas for the development of long-term loans.