Budget Policy and Economic Growth

Abstract

The paper analyzes the prior approaches to budget policy implementation in the context of accelerating economic growth. The authors review the academic issues of short and long term economic growth and discuss the Russian budget policy opportunities and constraints. The authors conclude that (1) in the current situation Russia has quite limited budget measures to smooth economic growth; (2) options to raise total government spending in short and middle-run perspective are absent, and, thus, (3) it is needed to change the expenditure structure along with transforming budget institutions in order to create preconditions for long-run economic growth.

Terms of Trade and Russian Economic Development

“…), 3 As a rule, a distinction is made between a nation's level of economic development and the level of economic growth. Economic development is characterized by close and complex links to a nation's welfare, social justice, the poverty rate, social polarization, and efficient operation of public institutions, while economic growth is typically understood as the rate of GDP growth (Helpman, 2004;Idrisov and Sinelnikov-Murylev, 2013). 4 The PPP is one of the basic concepts that determines price ratios at the international level.…”

Forming Sources of Long-run Growth: How to Understand Them?

“…It is known that growth rates in countries whose budget expenditure structure is similar to that in Russia will never be sufficient and expenditures on transport and infrastructure (expenditures within the "National Economy" section were reduced by 0.2 pct of GDP, from 5.5 to 5.3% of GDP, in favor of the above sections) 27 . 26 For more details see: Barro, Sala-i-Martin, 1992;Гайдар, 2005Гайдар, [Gaidar, 2005; Идрисов, Синельников, 2013 [Idrisov, Sinelnikov, 2013]; Дробышевский и др., 2011 [Drobyshevsky et al, 2011 ]; Кнобель, Соколов, 2012 [Knobel, Sokolov, 2012 ]. 27 For more details see: Идрисов, Синельников-Мурылев, 2013 [Idrisov, Sinelnikov-Murylev, 2013].…”

“…26 For more details see: Barro, Sala-i-Martin, 1992;Гайдар, 2005Гайдар, [Gaidar, 2005; Идрисов, Синельников, 2013 [Idrisov, Sinelnikov, 2013]; Дробышевский и др., 2011 [Drobyshevsky et al, 2011 ]; Кнобель, Соколов, 2012 [Knobel, Sokolov, 2012 ]. 27 For more details see: Идрисов, Синельников-Мурылев, 2013 [Idrisov, Sinelnikov-Murylev, 2013]. The authors' statistics on the general government expenditure structure in Russia, the EU, and the United States show that the Russian expenditure structure is heavily biased towards non-productive expenditures.…”

“…For example, see Идрисов, Синельников-Мурылев, 2013[Idrisov, Sinelnikov-Murylev, 2013]; Дробышевский, Назаров, 2012;[Drobyshevsky, Nazarov, 2012]; Юдаева, 2011[Yudayeva, 2011];Mountford, Uhling, 2008;Monacelli, Perotti, 2008;Blanchard, Perotti, 2002;Perotti, 2004; Giardano et al, 2008. 14 In 2007 and 2008, the interest rate on loans to the nonfinancial sector was negative: -2 and -1% respectively; later it was positive: 2% in 2010, 2.3% in 2011, 3.2% in 2012.15 For more details seeSolow, 1957;Helpman, 2004; Энтов и др., 2006 Энтов и др., [Entov et al, 2006.16 For more details seeIto, 2000;Barro, Sala-i-Martin, 1992; Isterly, 2006;Helpman, 2004. …”

“…For more details see:Acemoglu et al, 2006; Энтов и др., 2006 Энтов и др., . [Entov et al, 2006.18 For more details see:Tanzi, Zee, 1997;IMF, 1995; World Bank, 2006; Идрисов, Синельников-Мурылев, 2013 [Idrisov, Sinelnikov-Murylev, 2013 ].19 A 0% rate on the self-funded component has been established since 2002 for men born after 1952 and women born after 1956; a 2% rate on the self-funded component was established from2002 to 2004 for men born between 1953 and 1966 and women born between 1957 and 1966, it has been 0% since 2005; a 3% rate was from 2002 to 2003 for individuals born before 1967, a 4%…”