Public finance in the Komi Republic

Based on the endogenous economic growth paradigm, the possibilities of the regional fiscal policy of the Komi Republic to contribute to human capital growth and municipal development are evaluated. Aspects of an effective fiscal policy are under stood as follows: assurance of financial stability, regulation of the tax burden, supporting of productive spending along with ensuring a decent level of local fiscal decentralization, system of intergovernmental relations aimed at correcting negative effects of decentralized public finance. Fiscal policy of the Komi Republic is found to match the requirements of financial stability and, partially, productive structure of public spending. However, regional authorities do not have the power to manage the structure of the tax burden and revenues. The system of intergovernmental relations is far from providing effective local fiscal decentralization. These drawbacks formed the tendency of centralization of financial resources and decrease of the financial independence of local budgets. It complicates the implementation of the formally approved Komi Republic’s Strategy of Development as well as mitigation of various problems hindering the growth of investments, industrial production and gross regional product.