Decomposition of spatial inequality in budget provision by income sources: case of modern Russia
Decomposition of spatial inequality in budget provision by income sources: case of modern Russia

Author(s): Marina Yuryevna Malkina
Subject(s): Public Administration, Fiscal Politics / Budgeting, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: budget revenues per capita; spatial inequality; indices; sources; decomposition;
Summary/Abstract: The research is aimed at assessment of contribution of various income sources to spatial inequality in budget revenues per capita in modern Russia. It is based on itemized data on various tax and non-tax revenues in consolidated budgets of Russian regions in 2012-2015. For assessment of interregional disparities in budget revenues per capita we employed three alternative measures: the population-weighted Gini coefficient, the coefficient of variation and the Theil index. The decomposition of spatial inequality by sources was made by means of the A. Shorrocks and R. Lerman – Sh. Yitzhaki techniques, as well as by the nested disintegration of the Theil index. As a result we obtained the structure of spatial inequality in budget provision per capita in Russian regions for four years and estimates of spatial inequality elasticity with respect to various budget revenue sources. We found that two most profitable taxes, i.e. corporate income tax and personal income tax, provided the lion share of inequality, although the elasticity of inequality with respect to corporate income tax was significantly higher than to personal tax. Non-tax revenues, such as incomes obtained from the use of public and municipal property and sale of tangible and intangible assets, provided relatively larger contribution to spatial disparities in budget provision compared to their share in total revenues, enhancing inequality even stronger. Inter-budgetary transfers, including grants, subsidies, subventions and other intergovernmental aid, proved to have the most smoothing effect on budget provision, although relative efficiency of different types of transfers in different years altered due to the changes in rules of their funding.

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