Report of the visit by the clrae delegation to the Russian Federation (12 and 13 April 1999) - CG/BUR (5) 145

Approved by the Bureau of the Congress at the meeting of 7 May 1999
in Budapest

Introduction

Following the CLRAE Bureau’s decision of 5 March 1999, a Congress delegation comprising Mr Herwig van Staa, President of the Chamber of Local Authorities, Mr Claude Haegi and Mr Alexander Tchernoff, rapporteurs on local democracy and federalism in Russia, and one member of the Secretariat visited Moscow on 12 and 13 April 1999. The full programme of their visit is reproduced at the end of the report.

The visit formed part of monitoring local democracy and federalism in Russia under CLRAE Resolution 51 (1997). Another purpose of the visit was to draw the attention of senior Russian officials in governmental, presidential and parliamentary services to the need to apply the provisions of the European Charter of Local Self-Government.

During our visit, the delegation was able to meet representatives of the Congress of Municipalities of the Russian Federation, of the Ministry for Regional Policy, of the Presidential Administration and of the State Duma. The delegation members would like to thank all those in Russia who helped organise this visit and who were so willing to meet them.

Congress of Municipalities of the Russian Federation

One recent development has been the creation of the Congress of Municipalities of the Russian Federation (hereafter referred to as “the Congress”), founded by 40 national, interregional and specialist associations of Russian local authorities. Its aim is to defend the interests of the municipalities both at federal and international levels. The Congress statutes were ratified in a decree by President Boris Yeltsin, recommending that the federal authorities co-operate with the Congress in matters concerning local authorities. The Congress has good relations with the Presidential Administration, the State Duma’s Committee on Local Self-Government, the Ministry for Regional Policy and the Ministry for the Economy. Its relations with the Ministry of Finance and the Federation Council seem more distant, though its work is conducted in co-operation with the Federation Council’s Committee on Regional Policy.

The Congress is also involved with the work of the Council on Local Self-Government in the Russian Federation (directly accountable to the President) and with that of the governmental Council of Local Authority Leaders on problems linked to socio-economic reform (chaired by Mr Gustov, Deputy Prime Minister).

The Congress of Municipalities provided us with a document (see Appendix 1) analysing the Russian Federation’s implementation of CLRAE Recommendation 30 (1997).

Two subjects frequently brought up during our conversations with Congress members and representatives of the federal authorities were introducing financial autonomy for local authorities and the power structure within the Subjects of the Federation.

Unfortunately, members of the Federation Council were unable to put forward their views because they were unavoidably detained in their respective regions.

Financial autonomy of local authorities

The President of the Russian Federation promulgated the Law on financial autonomy of local authorities in spite of a veto by the Federation Council, which had opposed the Bill. According to representatives of the Congress of Municipalities of the Russian Federation, even the procedure for the adoption of the Law contained the ingredients of future conflict between mayors and governors.

Currently, local administrative budgets are funded primarily by appropriations allocated to the municipalities by the organs of the Subjects of the Federation. On average, local authorities receive 70% of their funds from federal taxes and 30% from local taxes, which are generally collected with great efficiency. Problems arise when the Subjects of the Federation exercise their right to adjust municipality budgets. Since the redistribution of income is based on the appropriations system, each Subject of the Federation negotiates its share of the budget with the Ministry of Finance of the Russian Federation before allocating the funds it receives among the various municipalities under its authority. Thus, for example, some large cities with high levels of economic activity lose a significant proportion of their income because it is redistributed by the Subject of the Federation. The problem lies in the fact that the percentage of funds allocated is not fixed, but varies from one year to the next, which means it is impossible to plan or to forecast income in the medium or long terms. Since there is no standard federal system, the Subjects of the Federation are free to use their own calculation scales, which the mayors (mainly those in large cities) are unhappy about, even those who receive significant support at regional assembly level. The Subjects of the Federation base their calculations on the average figures within the Federation as a whole.

In recent years the municipalities have tried to overcome a difficult economic situation and to meet governors’ criticisms by introducing local taxes. According to the Congress representatives we met, these taxes are satisfactorily collected. Nevertheless, the funds available are often insufficient to enable municipalities to carry out their responsibilities, especially when the state delegates functions without allocating corresponding financial resources. The Congress estimates that the municipalities have to provide 85% of the funding for social services (education, housing, etc).

Local authority representatives are also concerned that the number of local taxes, which helped the municipalities overcome their financial difficulties, is to be reduced under the provisions of the new Tax Code (already adopted, but not yet in force). The number of these taxes is expected to be cut from 21 to 5 and the introduction of new local taxes will be prohibited.

This difficult economic situation is aggravated by the fact that a number of laws designed to establish a financial base for local self-government have not yet been passed.

The Russian Federation Ministry for Regional Policy is also concerned that local authorities should enjoy true financial autonomy. Mr A.G. Voronin said that one of the federal government’s priorities is to find ways of (i) granting genuine financial autonomy to local authorities, (ii) making the financial equalisation procedure more coherent and more transparent, (iii) increasing municipal budgets and (iv) introducing an effective system for the management of available resources. The ministry’s calculations suggest that municipalities lose a large proportion of their income because of inefficient management methods. For this reason, the ministry has set up a project involving 153 municipalities with the aim of developing management systems appropriate to local authorities. The project is partly based on training of senior municipal officials in management techniques.

A trilateral committee on budgetary relations, comprising representatives of the government, the Federation Council and the State Duma, is currently discussing ways of making budgetary relations more transparent at federal, regional and local levels. One of its aims is to establish a method for calculating budget allocations.

At present, the lack of transparent financial equalisation procedures at federal level replicates itself within the Subjects of the Federation which is not in conformity with the Articles 9.5. and 9.6. of the European Charter of Local Self-Government. This is partly due to the slowness of the legislative process. For example, a number of Bills designed to establish a financial base for local self-government have not yet been passed. Representatives of the State Duma informed us that:

- the Bill on the procedure for transferring state property to the municipalities has been adopted after its first reading;

- the Bill on municipal land has been ready for a year but has not yet been considered because the land registry code has not been adopted. Some members of the Duma are proposing that the Bill be adopted anyway;

- the new Tax Code has been adopted, but its implementation has been delayed;

- the Bill on the organisation of state powers within the Subjects of the Federation has not been passed. In the meantime, tax and budget systems cannot be fully implemented until the state authorities establish a set of standards (guaranteeing minimum budget levels and setting minimum standards of social provision, for example), without which it is difficult to find objective criteria on which to base the calculation of local authority budgets.

Representatives of the Presidential Administration told us that 40% of Bills are not passed within the prescribed period. Consequently, the Subjects of the Federation often introduce legislation which does not necessarily conform to federal laws.

The governmental Council of Local Authority Leaders on problems linked to socio-economic reform, a consultative body responsible for initial discussion of socio-economic questions, is considering what amendments should be made to laws on the budgetary and tax systems, taking into account municipalities’ experiences and problems.

Organisation of state powers within the Federation and local authorities

One of the reasons for the CLRAE Bureau’s decision to send a delegation to Moscow was the information it had received concerning plans to reintroduce the system of appointing mayors and to reinforce the vertical administrative management structure.

During our discussions, it became clear that some Subjects of the Federation are opposed to the establishment of local authorities on their territory on the pretext that they would be unable to guarantee them economic and financial autonomy. From time to time, representatives of the Federation Council propose new legislation to reduce in one way or another the autonomy of local authorities. The economic crisis which broke out after 17 August 1998 exacerbated the dispute between mayors and governors, the latter group referring in its defence to the principle of effective spatial management.

In a number of Subjects of the Federation (six, according to the Presidential Administration), self-government bodies have not been set up at all, while in others these bodies exist but not everywhere. In some Subjects of the Federation, self-government bodies have been established in violation of federal legislation. Other Subjects of the Federation seem to want to abolish self-government bodies in the cities. For its part, the federal government is endeavouring to co-operate with the Subjects of the Federation by organising meetings on the spot in collaboration with regional (legislative and executive) authorities, by disseminating information, promoting management methods and training senior municipal officials. The Ministry of Justice estimates that, generally speaking, the number of violations of federal laws by Subjects of the Federation has fallen by half over the last year.

Appendix 2 of this report contains a letter written by an elected mayor whose municipal authority has been abolished. The Bureau could instruct the Working Group on Local Democracy to look into this particular case.

However, these difficulties, according to the people we met at the Ministry for Regional Policy, the Presidential Administration and the State Duma, should not affect the principle that representative and executive bodies of local self-government should be elected.

The current aim of the federal legislature and government is to make local executive bodies more accountable to the people and to representative councils. This is reflected in a Bill proposed by the Duma. In order to strengthen the role of representative bodies of local self-government, the Bill stipulates that their presidents should be elected from among the municipal councillors. An exception is made for rural municipalities with small populations, where, in accordance with the legislation of the Subjects of the Federation and with the statutes of the municipalities, the representative body may be chaired by the head of the municipal authority’s executive. For the same reason, it is planned to introduce a provision requiring the representative body of local self-government to have legal personality. Other bodies may also have legal personality in accordance with the statutes of the municipalities. These proposals are designed to give greater powers to local authorities’ representative bodies.

Conclusions

This report clearly shows that local self-government in the Russian Federation is still hampered by a number of difficulties. There are three particular problems: the establishment of genuine financial and economic autonomy for local authorities, compliance by some Subjects of the Federation with federal legislation governing the setting up of local self-government bodies and, finally, speedier legislation to strengthen the foundations of local self-government, make its organs more efficient and give them adequate resources.

The CLRAE delegation therefore suggests that the Russian authorities take into account the following proposals concerning implementation of the principles of the European Charter of Local Self-Government (hereafter referred to as “the Charter”):

- The federal authorities should work closely together with the Russian Federation Congress of Municipalities and consult it whenever necessary on matters relating to local self-government, particularly with regard to financial relations between the Federation, Subjects of the Federation and local authorities (Article 4(6) of the Charter). Procedure in this matter should be clearly set out in a legislative measure;

- the federal authorities should, as far as possible, heed the proposals of the Russian Federation Congress of Municipalities when discussing budgetary and tax codes so that local authorities are given the resources they need to carry out their responsibilities. Here, it should be remembered that Article 9(1) of the Charter states: “Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers”. These resources “shall be commensurate with the responsibilities provided for by the constitution and the law” (Article 9.2. of the Charter). Furthermore, paragraph 6 of the same article states: “Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them”;

- the Subjects of the Federation should observe the subsidiarity principle set out in the Charter when preparing local budgets and for financial equalisation purposes. Hence, pending adoption of the law on the procedure for transfer of state responsibilities to local authorities, the Subjects of the Federation should apply the subsidiarity principle by giving local authorities financial resources commensurate with their responsibilities. Affirming the subsidiarity principle in relations between authorities at different levels, Article 4(3) of the Charter states: “Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy”;

- the federal legislature should speed up the legislative process for the following Bills which must be adopted before the municipalities can have effective economic and financial autonomy: the Bill on procedure for transferring state property to the municipal authorities; the Bill on procedure for transferring state responsibilities to the municipal authorities; the Bill on the organisation of state powers within the Subjects of the Federation;

- representatives of the Subjects of the Federation, in collaboration with local authorities within their territory, should step up dialogue with local elected representatives in order to seek political solutions;

- where local authorities have not yet been set up, the Subjects of the Federation should seek ways of enabling the population to exercise its right, as set out in the federal law, to elect and stand for election to local authority organs. Article 3(2) of the European Charter of Local Self-Government, ratified without reservations by the Russian Federation, stipulates that the right to local self-government (in fact guaranteed by the Russian Federal Constitution) “shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them”;

- with a view to the transfer of certain state responsibilities and property to local authorities, the RUS II programme could focus on training for senior municipal officials in municipal property management techniques.

As far as the CLRAE is concerned, it is worth continuing to monitor local democracy and federalism in Russia. The CLRAE could perhaps hold a European conference in Russia on the problems of financial relations between regions and municipalities in federal states. Such a conference could help clarify financial relations between the Subjects of the Federation and local authorities in Russia.

The CLRAE President could write to the Russian Federation Council, drawing its attention to the requirement to apply the subsidiarity principle as set out in the European Charter of Local Self-Government in their relations with local authorities.

The Bureau may decide to forward this report to the Russian Authorities.

Programme of the CLRAE delegation’s visit to Moscow
(12 and 13 April 1999)
_______

12 April 1999

9.30 am – 12.30 pm Meeting with Mr SHIPOV, Executive Secretary of the Congress of Municipalities of the Russian Federation, and members of the Russian delegation to the CLRAE Chamber of Local Authorities (Venue: headquarters of the Congress of Municipalities of the Russian Federation, Ul. Novyy Arbat 21, 20th floor)

1 – 2 pm Lunch

2 – 4.30 pm Continuation of meeting at the Congress of Municipalities of the Russian Federation

5 pm Meeting with Mr VORONIN, Deputy Minister for Regional Policy of the Russian Federation (Venue: Ministry for Regional Policy of the Russian Federation, Trubnikovskiy pereulok 19)

13 April 1999

10 am Meeting with Mr SYSSUYEV, Deputy Chief of Staff of the President of the Russian Federation and Mr MINTS, Head of the Presidential Administration’s Department of Local Self-Government (Venue: Headquarters of the Presidential Administration, Staraya Ploshchad 4, entrance no.2)

4 pm Meeting with Mr POLYAKOV, Chair of the State Duma’s Committee on Local Self-Government, and members of the committee (Venue: State Duma, Georgievskiy pereulok 2)

APPENDIX 1

INFORMATION NOTE

drawn up by the Congress of Municipalities of the Russian Federation

on the implementation of the proposals set out
in the Recommendations of the 4th session
of the Congress of Local and Regional Authorities of Europe "
on the state of local self-government and federalism in Russia"
(Strasbourg, 3-5 June 1997)

DEVELOPMENT OF THE SITUATION

Since the holding of the 4th session of the Congress of Local and Regional Authorities of Europe, the process of establishing and developing local self-government in Russia has continued but in a very contradictory and inconsistent manner. While the state government authorities have officially supported the development of local self-government, their actual decisions have been aimed at substantially restricting the prerogatives of local self-government to the point of fully abolishing them.

POSITIVE DEVELOPMENTS:

1997:
- creation of a Directorate under the Russian Federation President for questions of local self-government;

- setting up of a Council for local self-government in the Russian Federation chaired by the President of Russia;

- setting up of a Council of heads of local government authorities under the auspices of the Russian Federation Government to deal with the problems of socio-economic reform;

- adoption of the Federal Law "On the financial bases of local self-government in the Russian Federation".

1998:
- creation of the Ministry for Regional Policy of the Russian Federation, with an increase in the number of structural sub-divisions dealing with local self-government issues;

- holding of a conference between the Prime Minister of the Russian Federation, Ye.M. Primakov, and local authority leaders;

- setting up, with the backing of the Russian President, of a Congress of Municipalities of the Russian Federation;

- resumption of the work on the problems of socio-economic reform of the Council of local authority leaders under the auspices of the Russian Federation Government authorities and under the chairmanship of the first deputy prime minister, V.A. Gustov;

1999:
- setting up of a Council of local authority leaders under the auspices of the Speaker of the State Duma of the Federal Assembly of the Russian Federation, G.N. Seleznev;

- signing of an Agreement on co-operation between the Ministry for Regional Policy of the Russian Federation and the Congress of Municipalities of the Russian Federation;

- backing for local self-government as the foundation of the power of the Russian people in a message from the President of the Russian Federation to the Federal Assembly.

NEGATIVE DEVELOPMENTS:

Political sphere

In 1998-99 the topical focus of the statements and actions of different politicians and officials has been the strengthening vertical command and limiting of the prerogatives of local self-government.

The Russian Federation Communist Party's preferred version of the draft Joint Declaration "On ensuring civil peace and political stability in the country" proposed "providing for measures for establishing full top-down power for the executive and legislative branches, bringing organs of local self-government back into the system of state power and reinforcing on that basis the unity of federal Russian statehood".

Similar declarations have been heard repeatedly from the leaders of the constituent entities of the Federation. The Governor of the Kaliningrad oblast, L.P. Gorbenko, introduced a bill in the State Duma seeking to amend the Federal Law "On general principles for the organisation of local self-government in the Russian Federation", so that the practice of electing municipal authority leaders would de facto be done away with.

The Prime Minister of the Russian Federation, Ye.M. Primakov, has gone on record with several double-edged statements concerning the strengthening of the vertical chain of command and the practice of electing municipal authority leaders.

The growth of this trend may do irreparable damage to the development and further emergence of local self-government.

Legislative sphere

The adopted version of the Federal Law "On the financial bases of local self-government in the Russian Federation" does away with the basic aim of the bill, namely the creation of a real financial basis for local self-government, through the continuous and long-term consolidation of minimum shares of federal and regional taxes as a form of local authorities' own budgetary revenue.

The introduction of a series of formulae for calculating those shares "on average per constituent entity of the Federation" lowered the proportion of local authorities' own budget revenue from 65 to 20%, which preserved the complete independence of municipalities from the authorities of the constituent entities of the Federation.

While it divides spending prerogatives between the different levels of the budget system, the Budget code has not consolidated the sources of revenue to cover them.

The Tax code, in violation of the Russian Constitution, has de facto deprived local self-government of local taxes and rates by reducing the proportion of local budget revenue they represent from 14 to 1% on average.

The new taxes, which by their physical nature gravitate towards the level of local authorities (sales tax, immovable property tax, a single tax on imputed income), are carried over to the budgets of the Federation's constituent entities. The package of tax laws reduces the constituent entities' share of income tax and VAT and their contribution to local budgets accordingly. In fact the strategy for reforming inter-budgetary relations looks at relations between the federal budget and the budgets of the Federation's constituent entities, ignoring the third tier of the budget system.

Municipal authority leaders were critical of the draft Law "On the status of elected officials of local authorities" and the draft Law "On municipal administrations", which excluded the possibility of local authority leaders and municipal officials to be elected to the representative bodies of the Federation's constituent entities, and also of the amendment to the Law "On general principles governing the organisation of local self-government" which deprived local authorities of the right to use the self-organisational model whereby the leader of the local authority may head up both the executive and representative bodies of local self-government.

Furthermore the following long-awaited laws have not been adopted:

- On state minimum social standards;

- On municipal land;

- On regulations for transferring state property to municipal ownership;

- On regulations for investing local authorities with individual state prerogatives;

- On regulations for compensating local authorities for additional expenditure arising from decisions taken by federal government authorities, and others.

The state of regional legislation on local self-government is no better.

In a great many constituent entities of the Russian Federation, legislation on local self-government is still in its initial stages. These include: the Republic of Altay, the Ingushi Republic, the Republic of Sakha (Yakutia), the Republic of Tyva, the Koryak autonomous oblast, the city of federal significance of St Petersburg.

In 1998 regional legislation on local self-government clashed with federal legislation in the republics of Adygeya, Bashkortostan, Dagestan, Ingushetia-Kalmykia, Komi, Mariy El, Sakha, Tatarstan, Khakassia, Karachayevo-Cherkessia, Chuvash; the kray of Krasnodar, Krasnoyarsk, Primorye and Stavropol; the oblasty of Volgograd, Kaliningrad, Kurgan, Kursk, Nizhniy Novgorod, Novgorod, Omsk, Oryol, Perm, Ryazan and Smolensk; the autonomous okrug of Ust-Ordyn Buryat.

The most typical violations of federal legislation by regional legislation include:

- restrictions of the independence of local authorities in deciding on matters placed within their remit by federal legislation, in particular as regards control over municipal property, the drawing up of local authority budgets and the determining of local authority structures;

- changes to the boundaries of territories where local self-government is practised, without consulting the local communities. For example, the legislation of the Moscow oblast has triggered a multitude of conflicts, which have developed into lawsuits lasting many years and given rise to restrictions on the right to local self-government of both citizens and the lawfully elected leaders of local authorities (Sitne-Shchelkanovskiy rayon or district of the Moscow oblast);

- he removal of individual territories from the sphere of influence of legislation on local self-government.

Instances of systematic violation of legislation in force merit separate mention

A great many of the Federation's constituent entities - for example the republics of Altay, Komi, Tyva and the Ingushi Republic - still have no fully fledged local authorities. In the republics of Bashkortostan, Sakha (Yakutia), Tatarstan, Khakassia and several others, local authorities have been set up but not throughout the entire territory.

Separate organs of local self-government were elected in Kalmykia in violation of the requirements of federal legislation. In the Kemerovo oblast, local authorities do not actually have independent budgets. The governing authorities of the Primorye kray have succeeded eliminating local self-government in Vladivostok, unlawfully dismissing the city's elected mayor, V.I. Cherepkov, and then doing away with elections to the representative body.

In a number of the Federation's constituent entities, municipal authorities are banned from joining leagues or associations of local authorities and those who are already members of such associations are banned from taking part in their activities.

The federal authorities have just decided, without consulting municipal authorities, to increase the pay of public-sector workers, inter alia at the expense of local authority budgets, which directly contravenes current legislative norms.

Obviously, such a situation can in no way be described as satisfactory.

Table 1 sets out an overall evaluation of the activities of the federal authorities during the period of constitutional and legal reform. This evaluation was presented at a symposium of local self-government professionals in January 1999 (in the town of Obninsk in the Kaluga oblast). The table shows experts' qualitative assessment of state decisions taken in a given year during the period of constitutional reform ("+" indicates a positive assessment, "-" a negative assessment).

Year

1993

1994

1995

1996

1997

1998

1999

Expert assessment

+

-

+

-

+

-

?

Information on the implementation of the proposals
set out in points 5 and 6 of Recommendation 30 (1997)
of the 4th session of the Congress of Local and Regional Authorities of Europe (Strasbourg, 3-5 June 1997)

Point 5

a) The European Charter of Local Self-government was ratified by the Russian Federation on 11 April 1998 and enshrined in corresponding federal legislation.

FEDERAL LAW

ON THE RATIFICATION
OF THE EUROPEAN CHARTER OF LOCAL SELF-GOVERNMENT

Adopted by the State Duma
on 20 March 1998
Approved by the Federation Council
on 1 April 1998

        To ratify the European Charter of Local Self-government of 15 October 1985, signed on behalf of the Russian Federation in Strasbourg on 28 February 1996.

President of the Russian Federation B. YELTSIN
Moscow, Kremlin
11 April 1998
No. 55-FZ

(Source: "Compendium of Russian Federation legislation", 13.04.98, no. 15, p.1695)

b) The Federal Law "On general principles for the organisation of local self-government in the Russian Federation" of 28 August 1995, No. 154-FZ, stipulates that local self-government is to be implemented in both built-up and rural rayony or districts. However, far from all the Russian Federation's constituent entities have satisfied those provisions of the federal law.

c) No information is available on the situation as regards the European Charter of Regional Self-government.

d) The following federal laws have been adopted to date:

    § the Tax Code of the Russian Federation (not yet in force);
    § the Budget Code of the Russian Federation (not yet in force);
    § the Federal Law "On the financial bases of local self-government".

The recommendation to adopt legislation on the organisation of state power within the constituent entities of the Russian Federation has not been acted upon to date.

Under the Federal Law "On general principles for the organisation of local self-government in the Russian Federation", local authorities are to run municipalities (towns and rural rayony or districts). The law prohibits state authorities and officials from implementing local self-government or appointing local authority officials.

In addition, two of the three aforementioned laws (the Federal Law "On the financial bases of local self-government" being the exception) were adopted without consulting municipalities and the associations representing them. As a result, the norms laid down in the tax and budget codes have, according to the conclusions of the experts of the Congress of Municipalities of the Russian Federation and in the opinion of the specialists of the municipalities themselves, substantially worsened the state of local finances and budgets.

e) As previously mentioned, not all the Federation's constituent entities have implemented the Federal Law "On general principles for the organisation of local self-government in the Russian Federation". At the same time, the constituent entities more often than not grant powers of self-government to rural rayony and try to deprive most towns and rural settlements of those powers.

f) At present, work on drafting model acts on the Federation's constituent entities is being undertaken by the Ministry for Regional Policy of the Russian Federation. However, owing to the lack of resources, only model acts for municipalities have been prepared at this time.

g) Thanks to the joint efforts of the Administration of the President of the Russian Federation, the Union of Russian Towns, the Ministry for Regional Policy of the Russian Federation and the Congress of Municipalities of the Russian Federation, proposals for amending current legislation to guarantee the right of municipal entities to appeal to the Constitutional Court of the Russian Federation have been prepared. They are now being examined by the State Duma of the Russian Federation.

Point 6

a)-d) The majority of constituent entities of the Russian Federation have shown a tendency to cut down on local self-government. The most consistent followers of this trend include virtually all the national republics and also the Kaliningrad and Smolensk oblasty, the Primorye and Krasnodar kray and other constituent entities.

As previously mentioned, organs of local self-government are usually created at the level of the large towns and rayony. Many constituent entities apply financial and political pressure to oblige small towns to waive their rights to self-government and assign their prerogatives to rayony.
The analysis of local finances from 1995 to 1998 carried out by the Congress of Municipalities of the Russian Federation shows that the base of local budget revenue is steadily shrinking, while ever more expenditure-based powers and responsibilities are being transferred to municipalities from federal and entity level.

The Federation's constituent entities allocate virtually no resources and make no substantial efforts to train municipal officials.

e) as for ensuring that the population is provided with adequate information on local matters, there are no systematic efforts to do so.

Conclusions

1. For the process of establishing and developing local self-government to take its course, it is necessary to devise as soon as possible a long-term programme of state structuring, whose component elements must include measures for the development of local self-government and also measures of state support for the socio-economic development of municipalities.

2. One individual thrust of that state structuring programme must be geared to creating a system of co-operation between state authorities and local authorities, providing an institutional platform for constructive interaction between those authorities in settling problems of socio-economic development and also for real influence by local authority representatives on the process of preparing state decisions.

3. As a priority, it is necessary to:

§ amend tax legislation in order to secure financial independence for local authorities;
§ amend the Code of civil law in order to broaden the scope of local authority prerogatives in the economic sphere;
§ strengthen state control over compliance with legislation in the sphere of local self-government.

Secretary of the Congress of Municipalities
of the Russian Federation B. Shipov



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