Financial and Legal Mechanisms for Municipal Entity Transformation: Experience of Russia and Other Countries
Financial Law Review
The amalgamations of municipalities take place in many countries, including Russia. One of the main reasons for this association is the possibility of solving the fi nancial problems of small municipalities with its help, and increasing the effi ciency of the use of budget resources. Does the amalgamation of municipalities achieve these goals? The foreign practice of several decades shows that not always after the merger budget funds begin to be spent more effi ciently. Russian practice is not
... an practice is not so long yet, but now analysis of budget data (for example, alignment of budgetary provision) shows that such conclusions can also be made in Russia. However, this requires a study of the fi nancial security of the newly created municipalities for several years. The article studies such important areas as the fi nancial reasons for the transformation of municipalities; fi nancial support of merging municipalities from higher budgets in order to ensure all territories of municipalities that are included in the newly created municipality; fi nancial and legal consequences of such an association, i.e. whether it is really effective, as was stated when deciding on the association; alignment of budgetary provision of municipalities. It is concluded that it is necessary to consolidate the principle of guaranteeing a municipality in Russian legislation at the federal level if it amalgamates with other municipal entities with fi nancial support at a level not lower than that which it had before the merger. The study results can be used to improve Russian legislation regarding the fi nancial support of municipalities in the process of combining them.