Differentiation Factors of the Debt Situation in Russian Urban Okrugs with over 100 000 Residents in 2015–2020

Abstract

This article analyzes the debt standing of 189 Russian urban okrugs with over 100 000 residents and the factors that define the differences in the debt situation among these urban okrugs. The study was conducted using the municipal debt size and structure indices contained on official websites of local administrative bodies, as well as the data on local fiscal revenue and expenditures from Rosstat’s database of municipal bodies. The results of the analysis show that urban okrugs with a larger population suffer from a higher debt burden on their budgets: the worst debt standing is characteristic of million-plus urban okrugs and other major regional centers. At the same time, there is no explicit dependence of the debt indicators on the fiscal situation and the level of economic development. This dependence is violated by the impact of other institutional conditions, including features of the federal and regional fiscal policies, social assistance of large businesses and other reasons. According to the analysis of the purposes of municipal loans to the studied urban okrugs, there are very few cases in which the debt is taken for the implementation of urban development projects. In Russia, the market for municipal bonds, which are a widespread phenomenon abroad, remains undeveloped as well as other new ways of reducing municipal debt burdens. All of this generates a negative forecast of the budget and financial standing of the largest centers for the next several years and again proves the acute need for reconsidering the fiscal and tax policy and the system of distributing powers at the local level.