DEBT SUSTAINABILITY AT THE SUBNATIONAL LEVEL IN RUSSIA: THEORY, SITUATION, RECOMMENDATIONS

Abstract

The relevance of the analysis of debt sustainability is explained by the need to preserve the state's borrowing capacity under the increasing risk of non-fulfillment of debt obligations. A decrease in the borrowing potential during the economic downturn reduces the overall potential of countercyclical fiscal policy. The purpose of the study is to develop recommendations to regional public authorities on the implementation of a balanced debt policy based on a comprehensive analysis of the implementation of debt policy in Russia and countries of the world at the subnational level and to identify the causes, opportunities and limitations of regional loans. The object of the study is the subnational units of countries of the world and their budget and debt policy. The hypothesis of the study was that intergovernmental transfers, but not debt, are the main tool for overcoming negative crisis phenomena at the regional level. According to the results obtained, budget loans, being initially an instrument of debt policy, in fact, has become a new type of intergovernmental transfers. An additional problem is that this creates increased uncertainty for fiscal policy at the regional level. Debt instruments are increasingly becoming the mechanism of intergovernmental relations that reduces the efficiency of the functioning of the budget system as a whole. The novelty of the study consists in detecting significant risks of loss of debt sustainability at the regional level of Russia, despite the low nominal size of the state debt of the regions and measures undertaken at the federal level. The presentation of the theoretical foundations and the conducted diagnostic of regional public finance system allowed us to formulate measures towards further improvement of the measures of the federal policy of regulating the debt sustainability of the regions. Research methodology: review of analytical materials, structural and substantive analysis of regulatory legal acts at the federal and regional levels of countries of the world, comparative analysis of international debt policy experience, systematization of debt policy instruments used in Russia and abroad, development of scientific and practical recommendations.

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