Trends in the Development of Sovereign Funds as a Tool of Budgetary Policy

Abstract

The subject of the researchis the activity of sovereign funds as a tool of the budgetary policy ensuring the sustainability of the budget system and having a positive impact on the national currency rate.The relevance of the researchis due, first, to the changing conditions, goals and tasks of establishing sovereign funds in the XXI century and, second, to the need to update approaches to coordination of the fiscal and monetary policies with account for modern macroeconomic challenges and shocks.The purpose of the researchwas to identify current trends in the development of sovereign funds and define the main areas for improving the mechanism for the formation of sovereign funds and making use of their money in Russia. Based on the analysis of the foreign and domestic experience in running sovereign funds, the paper reveals the stages and trends of their development. It also shows the changes in the conceptual approaches, sources and rules for the formation of sovereign funds and analyzes the prospects of their modernization. A special focus is placed on increasing the transparency of sovereign funds, in particular, Russian funds.The paper concludesthat in order to achieve the strategic goals and tasks of the Russian National Wealth Fund it is necessary to develop a long-term development strategy for Russian sovereign funds. Besides, to reduce the dependence of the budget system revenues on the world market prices, parts of corporate tax revenues and PIT revenues can be transferred to the National Welfare Fund, which will make it possible to maintain the counter-cyclical nature of the budgetary policy.