Fiscal Federalism and its main models

Fiscal Federalism - a system, implying autonomous operation budgets (which are on one level) at all stages of the budget process.It is based on certain principles, among which are:

1. Separate provision budgets of different levels.This means that each of them provides for the right of power and control its own source of income.In addition, this situation implies the possibility of independent use of these sources.

2. Compliance with the financial resources, which are the authorities that perform the functions.

3. The right to offset the costs, which demanded the decisions taken by higher authorities and government.

4. Separation of fiscal responsibility and authority for expenditures at the legislative level, which is produced by all authorities.

Fiscal Federalism in Russia due to the fact that the country occupies a vast territory and has some historical and national features of development of individual regions, requires improvement of its model.

As for the model, note that its ideal for

m, which would be suitable for all federations do not exist.The fact is that the development of each country is influenced by historical, economic, national and political factors.

However, the definition of the ideal model of fiscal federalism does exist.It lies in the fact that the amount of revenue powers possessed by the subjects of the federation should be equal responsibility for the expenses that are fixed for a certain level of power.However, if we consider the practical implementation of these requirements, it is clear that between them there is always a large gap, which is covered through revenue sources existing at the disposal of the budget, located at a higher level.

Fiscal federalism can be productive when legal distribution of powers performed efficiently, which is possible if the corresponding three aspects:

1. The division of revenue powers.

2. delimitation of spending authority.

3. Aligning budgets.

budget system can be horizontally or vertically balanced.The second principle is feasible when revenues are sufficient to perform the essential functions of the budget.That is, there is the concept of equality between expenditure and revenue authority.One of the important conditions vertically balanced system is a clear division of responsibilities between authorities.

With regard to the horizontal, it is characterized by a total compliance expenditure and revenue sides.

Fiscal federalism is the existence of two basic models:

1. Septic.It is characterized by the fact that regional authorities have a high level of financial independence, each level of the budgetary system is responsible for certain taxes, the central government has no control over the regional authorities.For this model is also characterized by weak development of the system of fiscal equalization and removal of responsibility from the central ruling elite for the debts of the regional governments and their budget deficit.

2. The cooperative model that is prevalent in the economy of many European countries.It is distinguished by the participation of the regional government in the redistribution of national income, the presence of taxes and revenues at each level of the budgetary system and the development of mechanisms for the redistribution of funds between these levels that is carried out by means of grants, subsidies and subventions.This model is applicable in those states where there are differences between the levels of the budget of the regions.