Inter-municipal cooperation in Russia: status, problems and prospects of development

In today’s complex and rapidly changing socioeconomic conditions, municipalities’ sustainable development is possible only with the effective use of the existing potential for territories’ development, the formation of favorable external controlled factors for municipalities’ development (federal and regional legislation, the fiscal system and the system of inter-budgetary relations, an effective mechanism of interaction between public authorities and local governments, etc.), as well as combining efforts and resources of various municipalities to solve common issues and development problems.

However, the results of a survey of heads of municipal entities of the subjects of the Russian Federation belonging to the European North of Russia1 (hereinafter – ENR) conducted in 2020 show that the main problems of the institute of local self-government are insufficient financial resources (shortage of own income sources, insufficient financial support from the state); passivity of the local population; insufficiently effective interaction with public authorities (dependence on public authorities of the subject of the Russian Federation, bureaucratic obstacles in the interaction between the levels of government); general imperfection of legislation concerning municipal powers’ functioning and development, and the presence of powers that are not directly related to the institution of local self-government, limited powers in the field of economic development of the municipality (more than half of all respondents indicated these problems and factors).

Most of the Russian municipalities (mainly settlements) currently do not have sufficient funds and material resources necessary for the development and implementation of plans and programs of socio-economic development, focused on both the effective and complete solution of all issues of local importance, and the prompt solution of all existing problems. According to the results of 2020, the share of own (tax and non-tax) revenues in the total volume of local budget revenues amounted to only 33% on average for all municipalities of Russia (and it was minimal in municipal districts making up only 23%; Tab. 1 ). Accordingly, most of the revenues of local budgets are gratuitous receipts from higher budgets (grants, subventions, subsidies and other inter-budget transfers), the volume of which is not stable and cannot be projected for a period of more than 1 year.

We should also note that the majority of municipal districts and rural settlements of the entities of the Russian Federation belonging to the ENR are sparsely populated. At the end of 2019,

Table 1. Share of own (tax and non-tax) revenues in the total revenue of local budgets in 2020, %

Type of municipality RF Republic of Karelia Komi Republic Arkhangelsk Oblast Nenets AO Vologda Oblast Murmansk Oblast Municipal districts 23.4 26.4 27.4 14.8 97.6 27.8 23.8 Municipal okrugs - - - - - - - Urban districts 37.2 31.0 30.7 39.3 85.1 38.0 43.3 Urban districts with intra-urban division 34.7 - - - - - - Inner-city districts 44.2 - - - - - - Inner-city territories of cities of federal importance 63.2 - - - - - - Urban settlements 47.8 37.7 52.0 38.1 36.9 35.2 37.5 Rural settlements 31.6 45.0 12.1 26.2 11.1 23.1 37.0 On average for all municipalities 32.6 29.8 29.3 29.4 68.5 32.4 39.1 Source: Reports on the execution of consolidated budgets of entities of the Russian Federation and budgets of territorial state extrabudgetary funds. Official website of the Federal Treasury of the Russian Federation. Available at:

more than half of the districts had less than 20 thousand inhabitants (the population in 19–20% of the districts of the Vologda and Murmansk oblasts is less than 10 thousand inhabitants)2; more than half of rural settlements have a population of less than 1 thousand people (36% of settlements in the Komi Republic have population of less than 500 people). This leads to the fact that such sparsely populated territories cannot attract large investors, as a rule, they are characterized by a lower own budget potential, and also lose competition for migrants, budget support funds from the subject of the Russian Federation to other, more populated municipalities.

Development of inter-municipal cooperation may be one of the ways to solve the problem of insufficiency of the financial and economic base of municipalities. According to E.A. Gutnikova, this means, “combining efforts, material and nonmaterial resources of local self-government bodies of municipalities on a mutually beneficial basis to create public goods or provide public services” [1].

In our opinion, there are two approaches to understanding inter-municipal cooperation: in a broad sense, it is any interaction, contacts of municipalities with each other in order to exchange experience, jointly solve issues and problems of local significance, provide services to the population; in a narrow sense, it is various forms of municipalities’ interaction based on agreements, contracts, decisions of local selfgovernment bodies (associative, contractual and economic cooperation). In this study, we will consider precisely the “narrow” understanding of cooperation.

Inter-municipal cooperation helps to reduce the costs of solving individual problems of local importance, the emergence of a cumulative effect in the implementation of projects, and ultimately to increase the overall level of territory’s development. Accordingly, from a scientific and practical point of view, it is important to analyze the current state and problems of organizing inter-municipal cooperation in Russia, to determine the criteria for its necessity, to substantiate the directions for improving this management mechanism, which is the purpose of the presented study.

Forms of inter-municipal cooperation in Russia and the countries of the world

The European Charter of Local Self-Government (signed by the member States of the Council of Europe on October 15, 1985 in Strasbourg; in Russia it is ratified by Federal Law 55-FZ of April 11, 1998 and entered into force for the Russian Federation on September 1, 1998) states that “local self-government bodies have the right to cooperate and unite with other local self-government bodies to perform tasks of common interest within the limits established by law”.

In foreign practice, inter-municipal cooperation has become widespread and is carried out in various forms: inter-municipal councils (Finland); syndicates (France, Spain); districts, communities, communes, agglomerations, urban communities (France); regional development agencies (Germany); Chicago Metropolitan Planning Agency (USA); joint administrations (Denmark, Germany); transfer of powers between municipalities (Germany); centers, institutes, bureaus, societies, research institutes, Credit Association of Local authorities (within the framework of the activities of the National Association of Local Authorities) (Denmark); cooperative societies, joint-stock companies, partnerships (Denmark); limited liability company (Denmark, Bulgaria); purchase of services by one municipality from another (Denmark) [2].

Associative forms of inter-municipal interaction (associations, councils) have shown the greatest development abroad; they are created not so much for the purpose of protecting the political rights of municipalities and promoting their interests, as for the development of management technologies (creation of various bodies, from coordinating to managing); protection of municipal services’ professional interests; pooling the resources of municipalities in the form of various commercial and non-commercial economic entities with associations to provide services to municipalities [2].

In the Federal Republic of Germany (FRG), all communes’ tasks of the responsibilities, as well as transferred state powers, can be the subject of intermunicipal cooperation. Separate laws of federal states establish the specifics of the application of various legal cooperation forms. The most common areas of cooperation in Germany are regional marketing and tourism development; water supply and water management; information technology; economic and employment promotion; territorial (spatial) planning [3].

In Germany, there are public and private law forms of inter-municipal cooperation. The most commonly used public law forms are a public law contract (among other things it may provide the transfer of a separate task from one commune to another), merged municipal units or a union of administrative units. In contrast to public legal forms, private legal forms (limited liability companies and target associations) are considered only where cities and communities carry out economic (entrepreneurial) activities [3].

Thus, in many European countries, the legal status of an inter-municipal association as a subject of public law is regulated in sufficient detail, and its activities are controlled from two sides: the state and the local community. In particular, a number of states have adopted special laws in the regions (for example, in the federal states of Germany) regulating the procedure for the creation and functioning of inter-municipal organizations [2]. The forms of economic entities are similar to the Russian ones, but the possibilities for municipalities’ participation in them are much wider.

Analysis of the current Russian legislation (in particular Federal Law 131-FZ, dated October 6, 2003 “On the general organizational principles of local self-government in the Russian Federation”, hereinafter 131-FZ) allows us to conclude that, depending on the goals and organizational and legal content, inter-municipal cooperation can be carried out in three main forms [4]:

• 1.    “Associative” cooperation (councils and other municipal entities associations; Paragraphs 1–3 of Article 8, Articles 66–67 of 131-FZ). An example of this form of cooperation is the creation of a Single All-Russian Association of Municipal Formations – the All-Russian Congress of Municipalities (OKMO) which was founded in 2006 by the municipalities’ councils of the entities of the Russian Federation (currently they are functioning in all 85 subjects of the Russian Federation). The purpose of OKMO and the councils’ activities is to organize interaction and cooperation of municipalities, to express and protect the municipalities’ interests in dialogue with public authorities.

• 2.    “Contractual” cooperation (conclusion of contracts and agreements on cooperation, joint activities between municipalities; Paragraph 4 of Article 8 of 131-FZ). This form of cooperation includes various agreements of intent, agreements on cooperation, exchange of experience, provision of methodological and advisory assistance on various issues related to the jurisdiction of municipalities, as well as agreements between settlements and the municipal district on the transfer of part of the powers from the settlement level to the district level, and vice versa in some cases.

• 3.    “Economic” cooperation (creation of economic and non-commercial inter-municipal organizations; Paragraph 4 of Article 8, Articles 68– 69 of 131-FZ).

In 2019, the All-Russian Association for Local Self-Government Development was established, which currently includes all 85 regional associations – municipalities’ councils of the entities of the Russian Federation. The founders of the association were the All-Russian Congress of Municipal Formations, the All-Russian Council of Local Self-Government, the Union of Russian Cities, the International Assembly of Capitals and Large Cities, the Association for the Development of Urban Settlements “Russian Province”, the Association of Closed Administrative-Territorial Entities of the Nuclear Industry, the Association of Volga Region Cities, the Union of Cities of the Center and North-West of Russia.

It should be noted that in accordance with Federal Law 307-FZ dated August 2, 2019, the Budget Code of the Russian Federation has been amended to provide for the possibility of providing “horizontal” subsidies at the municipal level, that is, subsidies from one local budget to another local budget, in order to co-finance expenditure obligations arising from the exercise of the powers of local self-government bodies to address issues of local importance. The purposes and conditions for the provision of these subsidies are established by agreements between local administrations concluded in accordance with the procedure established by the decision of the representative body of the municipality which provided the subsidy.

Inter-municipal organizations can be formed in order to combine financial resources, material and other resources to solve issues of local importance. Inter-municipal associations and organizations may not be vested with the powers of local selfgovernment bodies.

In accordance with Article 68 of 131-FZ, the representative bodies of municipal entities may take decisions on establishing inter-municipal business companies in the form of non-public joint stock companies (NAO) and limited liability companies (OOO). Inter-municipal business companies operate in accordance with the Civil Code of the Russian Federation and other federal laws. Local self-government bodies can also act as co-founders of an inter-municipal public mass media. In accordance with Article 69 of 131-FZ, representative bodies of municipalities may take decisions on establishing non-profit organizations (NPOs) in the form of autonomous noncommercial organizations (ANO) and foundations. NPOs of municipalities operate in accordance with the Civil Code of the Russian Federation, the federal law on non-profit organizations, and other federal laws.

The Spatial Development Strategy of the Russian Federation for the period up to 2025 (approved by the Decree of the Government of the Russian Federation no. 207-р dated February 13, 2019) identifies the unrealized potential of interregional and inter-municipal interaction as one of the problems of the country’s spatial development. Accordingly, the promotion of interregional and inter-municipal cooperation is indicated as one of the principles of spatial development. The Strategy pays special attention to the development of inter-municipal cooperation in the largest urban agglomerations.

In March 2020, following the meeting of the Council for the Development of Local SelfGovernment held on January 30, 2020, the President of the Russian Federation approved a list of instructions. The key task is to instruct the Government of the Russian Federation to submit, by October 1, 2021, a draft of the new Foundations of the State Policy of the Russian Federation in the field of local self-government development until 2030. This conceptual document, which is to define the long-term orientations and the role of the local self-government institution in the country’s development, should reflect the organizational foundations of the local self-government functioning and effective mechanisms for its implementation. Inter-municipal cooperation is certainly in this list.

Research methodology and its justification

Foreign [3; 5–13] and Russian [1; 2; 14–31] scientists and experts consider various aspects of the analysis, functioning and development of intermunicipal cooperation in various areas of territorial development: its forms in the countries of the world are revealed; regulatory, organizational and other bases are considered; methodological tools for assessing the effects of the organization of inter-municipal cooperation are proposed;

directions for improving the forms of cooperation and mechanisms for its implementation are substantiated.

The analysis of the existing foreign and Russian practice shows that the main advantages and effects of inter-municipal cooperation are the following3:

• 1)    economies due to scale (an increase in the number of consumers and the scale of the service decreases the unit cost of the service provision);

• 2)    improving the services quality (combining financial opportunities to provide a particular service can also improve its quality while maintaining the previous costs through the use of more technological installations, more qualified personnel, etc.);

• 3)    completeness of the coverage of the territory of the services provision (cooperation in the provision of individual services is provided by the costs of all participants in the services provision);

• 4)    ensuring the functioning of inter-municipal infrastructure (tools of inter-municipal cooperation allow solving the problem of joint management of such infrastructure);

• 5)    attracting investments (a larger entity of economic relations appears, which makes it possible to attract investors more effectively and successfully, engage in territory marketing);

• 6)    external financing (within the framework of inter-municipal cooperation, socially and economically significant projects for the regional level can be proposed, which can be supported by financial resources from higher budget levels).

To assess the economic effects of the organization of inter-municipal cooperation (in the framework of such forms as the transfer of powers to another level, the joint solution of individual issues by different municipalities, the transfer of the solution of a separate task of local development to a specially created inter-municipal organization), scientists propose various approaches.

Thus, E.S. Arumova4 formalized and tested an algorithm for calculating the effectiveness of intermunicipal cooperation based on the use of indicators of the expenditure part of budgets and budgetary provision of rural municipalities, which can be used to make a decision on inter-municipal cooperation. To analyze the effectiveness of the cooperation of municipalities, the author proposes to estimate the cost of implementing the authority per inhabitant without taking into account intermunicipal cooperation and considering it. In this case, personnel, administrative, material and technical resources (PAMTR) are also calculated, which affect the cost of providing budgetary services that are spent on the implementation of the authority). The PAMTR indicator is calculated using the following formula:

PAMTR = P ⋅ BPR_LR ⋅ BNR_MTC, (1)

where P is the total amount of expenses for the implementation of the authority of the municipality; BPR_LR is the basic standard for reducing the cost of remuneration of municipal employees of the i-th municipality in the joint exercise of authority; BNR_MTC is the basic standard for reducing the cost of material and technical costs per staff unit of the i-th municipality in the joint exercise of authority.

Inter-municipal cooperation is advisable if the cost of implementing the authority per inhabitant in cooperation is less than when performing it independently.

M.V. Zinchenko5 suggests assessing “the impact of inter-municipal integration on the main indicator of the development of a municipal area – gross municipal product. Integrated inter-municipal entities provide an additional effect, which is that the total effect of their activities is greater than the sum of the effects of the activities of individual municipalities. When creating an intermunicipal integrated structure, there is also a social effect, which consists primarily in increasing (or preserving) jobs and wage growth”.

The effect of inter-municipal integration in the municipal gross product of the district can be represented by the following formula:

MGP R(IMC) = ∆ А м / В м , (2)

where ∆ А_м is the increase in the gross municipal product of the district after the creation of an intermunicipal integrated structure; В_M is the cost of creating and operating an inter-municipal integrated structure.

At the same time, the results of the study of the theoretical aspects of inter-municipal cooperation allow us to assert that the issues of determining the expediency of organizing cooperation itself between various municipalities and its various forms are not fully worked out. In addition, the current Russian practice of transforming the municipal-territorial structure in terms of large-scale unification of rural and urban settlements, as well as the transformation of municipal districts into urban districts (in some subjects of the Russian Federation since 2011) and municipal districts (since 2019) with the liquidation of the settlement level of management indicates the replacement of possible inter-municipal cooperation of settlements by the functioning of local self-government bodies and municipal organizations of a new, unified, larger municipality (enlarged settlement, city or municipal district). These points are taken into account in the approach proposed below to determining the expediency and choosing the form of inter-municipal cooperation, which makes up the scientific novelty of the study. This methodological approach was based on the analysis, systematization of experience and identification of problems of the inter-municipal cooperation organization in Russia, problems of functioning of the local self-government institute, taking into account current trends in the municipalterritorial structure, the need to create favorable conditions for expanding the practice of applying such a management mechanism.

Conclusions and proposals are substantiated by the results of analysis of not only statistical data (Rosstat information), but also information on the execution of local budgets (database of Russia’s municipalities indicators), analysis of organization of various forms of inter-municipal cooperation in the entities of the Russian Federation (data from the Internet and the Federal Tax Service of the Russian Federation), as well as the results of a questionnaire survey of municipalities’ heads of the macro-region – the European North of Russia, conducted in 2020 with the direct participation of the author of the article. The research was based on the use of general scientific (analysis, synthesis, generalization, comparison) and applied (statistical and economic analysis) methods.

Research results

As of January 1, 2020, 20,846 municipal entities were functioning on the territory of Russia, which is 3,361 units less than in 2006 and 3,061 less than in 2009 (Tab. 2). The most significant reduction in the number of municipalities among the regions of the European North of Russia (by 51%) for 2006– 2019 occurred in the Vologda Oblast (due to the active rural settlements unification).

As of the end of 2019, 2,075 municipalities (96.3% of their total number) participated in the activities of associations of municipal entities and inter-municipal non-profit organizations, 521 municipalities (2.8%) – inter-municipal commercial organizations ( Tab. 3 ). Over 13 years, the number of municipalities participating in the activities of inter-municipal economic societies in the whole country increased by 346 units or 2.4 times. According to Rosstat data, at the end of 2019, only 18 municipalities in the regions of the European North of Russia (all of them are in the Vologda Oblast) participated in inter-municipal commercial organizations.

The analysis of business companies and noncommercial organizations registered in the regions of the European North of Russia, conducted on the basis of data from the Federal Tax Service of the Russian Federation, showed that they all belong to the housing and utilities sector (types of activities are “management of housing stock operation”, “production, transmission and distribution of steam and hot water (thermal energy)”, etc.; Tab. 4 ). At the same time, a number of inter-municipal organizations have been liquidated in recent

Table 2. Dynamics of the number of municipalities at the end of the year, units

Territory 2006 2009 2019 2019 to 2006, % Total RS Total Total MD UD US RS Total RS RF 24207 19919 23907 20846 1673 632 1398 16821 86.1 84.4 Republic of Karelia 127 87 127 125 16 2 22 85 98.4 97.7 Komi Republic 211 175 211 178 14 6 14 144 84.4 82.3 Arkhangelsk Oblast 229 179 229 203 19 7 20 157 88.6 87.7 Nenets Autonomous Okrug 21 18 21 21 1 1 1 18 100.0 100.0 Vologda Oblast 372 322 302 207 26 2 21 158 55.6 49.1 Murmansk Oblast 42 10 40 40 5 12 13 10 95.2 100.0 Designations: MD – municipal district, UD – urban district, US – urban settlement, RS – rural settlement. Note: at the end of 2019, 33 municipal districts, 3 urban districts with intra-urban division, 19 inner-city districts and 267 inner-city territories of federal cities also functioned in Russia. According to: Formation of local self-government in the Russian Federation: Statistics bulletin. Federal State Statistics Service. Available at:

Table 3. Dynamics of the number of municipalities participating in organizations of inter-municipal cooperation in 2006-2019, units

Territory	Number of municipalities participating in associations of municipal entities, in inter-municipal NPOs on a voluntary basis				Number of municipalities participating in associations of municipal entities, in inter-municipal NPOs on a voluntary basis
	2006	2009	2019	2019 to 2006, %	2006	2009	2019	2019 to 2006, %
RF	21798	20890	20075	92.1	241	547	587	243.6
Republic of Karelia	47	47	125	266.0	0	1	0	-
Komi Republic	210	211	178	84.8	0	7	0	-
Arkhangelsk Oblast	214	213	189	88.3	0	0	0	-
Nenets Autonomous Okrug	20	20	18	90.0	0	0	0	-
Vologda Oblast	371	301	207	55.8	27	0	18	66.7
Murmansk Oblast	41	40	40	97.6	0	0	0	-

According to: Formation of local self-government in the Russian Federation: Statistics bulletin. Federal State Statistics Service. Available at:

Table 4. Examples of existing inter-municipal organizations in the territory of the European North of Russia

Organization name Types of economic activity of the organization OOO “Inter-municipal Enterprise “Suoyarvi Management Company” (founders: administrations of Suoyarva District, Veshkelsky, Naistenyarvsky, Loymolsky rural settlements of the Republic of Karelia) 68.32.1 Management of the operation of the housing stock for remuneration or on a contractual basis; 37.00 Collection and treatment of wastewater; 41.20 Construction of residential and non-residential buildings, etc. OOO “Inter-municipal housing and communal organization” (founders: administrations of Valdai, Idel, Popovporozhsky, Chernoporozhsky rural settlements of the Republic of Karelia) 68.32.1 Management of the operation of the housing stock for remuneration or on a contractual basis; 35.11.4 Production of electricity obtained from renewable energy sources, including those generated by solar, wind, geothermal power plants, including activities to ensure their operability; 35.30.14 Production of steam and hot water (thermal energy) by boiler houses, etc. OOO Inter-municipal enterprise “Inter-district electric heating networks” (founded by the administrations of Kharovsky, Belozersky, Vytegorsky districts of the Vologda Oblast) 35.30.1 Steam and hot water production (thermal energy); 33.14 Repair of electrical equipment; 35.12 Transmission of electricity and technological connection to distribution power grids, etc. According to: Information on the state registration of legal entities, individual entrepreneurs, farming households. Federal Tax Service of the Russian Federation. Available at: years, or organizations are currently in liquidation or bankruptcy, respectively, they do not carry out their activity any longer. Hence, there are also noticeable discrepancies in the number of municipalities participating in economic intermunicipal cooperation according to Rosstat, and the number of municipalities that are founders of inter-municipal organizations according to the Federal Tax Service.

As an example of specific areas, mechanisms of cooperation between municipalities within the urban agglomeration, we can cite the cooperation of Vologda with three adjacent districts of the region ( Tab. 5 ).

According to the results of a survey of the municipalities’ heads of the European North of Russia, conducted in 2020, the most common forms of interaction between municipalities were identified as follows:

– exchange of experience in the government bodies’ activities in resolving issues and problems of local importance (81% of the surveyed indicated this; Tab. 6 );

– organizing and holding joint events (44%);

– pendulum migration (regular, daily trips of the population from one settlement, place of residence to another to work or study and vice versa; 43%).

Table 5. Existing forms of interaction between the city of Vologda and adjacent districts included in the Vologda agglomeration

District	Areas of cooperation
Vologodsky District	– In October 2010, an Agreement on Cooperation between the Vologda City Administration and Vologodsky District was signed, which provides for the creation of conditions for the development of trade and expansion of the agricultural market. -    On November 2, 2011, an Agreement on cooperation between the Administration of the city of Vologda and Vologodsky District was signed in the development of small and medium-sized businesses, folk arts and crafts, as well as tourism. -    On November 16, 2012, another agreement on cooperation in the field of agriculture and processing industry between the regional center and Vologodsky District was signed. -    In 2014, an agreement on cooperation was signed between the municipal formation “City of Vologda” and the municipal formation Vologodsky Municipal District in order to: 1)    creating conditions for providing residents of the city of Vologda and Vologodsky Municipal District with trade services; 2)    creating conditions for expanding the market for agricultural products, raw materials and food; promoting the development of small and medium-sized businesses; 3)    increasing the competitiveness of local producers. The subject of the agreement is to unite the efforts of the city and district authorities aimed at mutually beneficial cooperation of the executive and administrative bodies of local self-government on the implementation of issues of local significance of the city and the municipal district to achieve the goals of the agreement on the principles of equality, mutual understanding, respect and trust. As part of the execution of the agreement, its parties assume the following obligations: to inform the other party about the ongoing fair events, fairs and exhibitions planned to be held in the city of Vologda and Vologodsky District; take part in the organization and conduct of city and regional exhibitions, fairs, celebrations, conferences and forums; take part in the implementation of the project “Zabota” City Discount Card”; ensure that information about the activities carried out is brought to the attention of citizens, small and medium-sized businesses, and other business entities; create optimal conditions for the participation of the population of the city of Vologda and Vologodsky District in fairs, fairs-exhibitions, festive events held at the initiative of the Parties; to assist the development of small and medium-sized businesses in the field of trade and the development of the market for agricultural products, raw materials and food. In order to implement the provisions of the agreement, the parties can create joint working bodies (working groups), as well as develop and adopt joint working documents (programs, plans for joint activities), hold bilateral consultations, working meetings and seminars.
Gryazovetsky District	-    On February 15, 2013, a cooperation agreement between the city of Vologda and Gryazovetsky District was signed. The purpose of the agreement is to create conditions for providing residents of the district with trade services (unimpeded participation of the district’s commodity producers in exhibitions-fairs in Vologda); promoting the development of small and medium-sized businesses; increasing the competitiveness of local producers; informing the population and producers about cultural events held by both parties; creation of joint working groups, seminars, consultations on various aspects of trading activities. -    On July 8, 2014, agreements between the Administration of Gryazovetsky Municipal District and trade organizations for participation in the project “Zabota Card – Gryazovetsky District” were signed.
Sokolsky District	- On March 15, 2016, an agreement between the city of Vologda and Sokolsky District on cooperation on the social project “Discount card Zabota” was signed. On July 19, 2016, a cooperation agreement by the head of the city of Vologda and the head of the town of Kadnikov was signed.
Districts of the region that are not included in the agglomeration	The city of Vologda is cooperating with many districts of the region within the framework of the social project “Zabota”, which was launched in Vologda on December 15, 2009, and since 2016, 23 districts of the region have joined it. The project involves the issuance of discount cards to certain categories of citizens (pensioners, veterans, etc.), which can be used in a number of municipalities’ shops and gas stations, as well as the creation of cultural and leisure centers “Zabota” in the region’s districts, following the example of such a center in Vologda.
According to: Information of the official websites of the Administrations of the city of Vologda, Vologodsky, Gryazovetsky and Sokolsky municipal districts of the Vologda Oblast.

Table 6. Distribution of respondents’ answers to the question “What forms of interaction of your municipality with the neighboring (having common borders) ones (settlements, districts, urban districts) do you know?”, % of respondents

Answer option	RS	US	MD	UO	On average for all municipalities
Exchange of experience in the authorities’ activities in solving issues and problems of local significance	87.8	70.0	79.4	57.1	81.4
Organization and holding of joint events, projects	34.1	60.0	64.7	35.7	43.6
Pendulum migration (regular, daily trips of the population from one locality, place of residence to another to work or study and back)	37.8	60.0	44.1	57.1	42.9
Within the framework of agreements concluded with local selfgovernment bodies	28.0	10.0	44.1	14.3	29.3
Availability of production and economic relations between enterprises, organizations from neighboring municipalities	13.4	20.0	38.2	35.7	22.1
Using the neighboring municipality’s resources (natural, etc.)	9.8	10.0	17.6	21.4	12.9
Organization of joint maintenance and development of infra-structure	8.5	20.0	2.9	14.3	8.6
Development of mobile forms of public services	6.1	10.0	8.8	0.0	6.4
According to: Results of the survey of municipalities’ heads, 2020 (here and Tables 7, 8).

In turn, the priority areas of cooperation of municipalities’ local self-government bodies, according to the heads, are (on average, more than a third of respondents chose these answer options; Tab. 7 ) creation and development of common links, infrastructure facilities; joint use and development of existing infrastructure (roads, communications, services, etc.); development of industrial and economic ties.

The municipalities’ heads advocate the development of closer cooperation with other municipalities in various areas and in various spheres, but in practice only organizational and informational forms of cooperation are being implemented so far. In many ways, this situation is connected with the existence of a number of legislative, organizational, financial and other problems, obstacles, the key of which, according to the heads of municipalities, are: lack of financial opportunities for cooperation, experience in organizing and implementing inter-municipal projects and programs in the social and economic sphere; lack of trained managerial personnel capable of managing these processes effectively (Tab. 8).

Table 7. Distribution of respondents’ answers to the question “Which areas of inter-municipal cooperation are the most priority for your municipality to participate in it?”, % of the number of respondents

Area	RS	US	MD	UO	On average for all municipalities
Creation and development of common links, infrastructure facilities, for example, a single housing and communal services sector, water supply systems, solid waste disposal, etc.	57.1	60.0	32.4	42.9	49.6
Sharing and development of existing infrastructure (roads, communications, services, etc.)	29.9	40.0	50.0	28.6	35.6
Development of industrial and economic relations	22.1	30.0	55.9	42.9	33.3
Involving specialists serving several settlements	39.0	30.0	17.6	7.1	29.6
Development of interrelations in the legislative and legal sphere (association for the protection of common interests at various levels)	35.1	20.0	20.6	7.1	27.4
Transfer of powers for more effective implementation	32.5	20.0	23.5	0.0	25.9
Inter-municipal humanitarian contacts, interaction in the field of culture	19.5	10.0	32.4	28.6	23.0
Solving environmental safety problems	18.2	20.0	29.4	35.7	23.0

End of Table 7

Area	RS	US	MD	UO	On average for all municipalities
Development of certain types of economic activity	11.7	0.0	29.4	42.9	18.5
Sharing of natural resources	22.1	10.0	17.6	0.0	17.8
Development of trade relations	13.0	30.0	23.5	14.3	17.0
Development of mobile forms of public services	13.0	0.0	11.8	0.0	10.4
Interaction in the field of education, for example, the creation of school districts	3.9	0.0	11.8	14.3	6.7

Table 8. Distribution of respondents’ answers to the question “What, in your opinion, hinders the development of inter-municipal cooperation?”, % of respondents

Factor	RS	US	MD	UO	On average for all municipalities
Lack of financial opportunities for such cooperation	69.1	44.4	44.1	71.4	61.6
Lack of experience in organizing and implementing inter-municipal projects and programs in the social and economic spheres	46.9	44.4	61.8	71.4	52.9
Lack of trained managerial personnel capable of effectively managing these processes	35.8	66.7	61.8	28.6	43.5
Lack of interdepartmental coordination and interaction of all levels of government	25.9	33.3	41.2	14.3	29.0
Underdevelopment of the federal and regional legal framework in the field of inter-municipal cooperation	30.9	11.1	35.3	7.1	28.3
Competition between municipalities for resources, primarily financial ones	19.8	11.1	29.4	57.1	25.4
Transport and infrastructure restrictions	23.5	33.3	17.6	35.7	23.9
The problem of property differentiation	21.0	22.2	23.5	35.7	23.2
Lack of analytical information on the opportunities and needs of other municipalities	22.2	22.2	20.6	21.4	21.7
Lack of initiative of local self-government bodies of other municipalities	13.6	22.2	11.8	7.1	13.0
Building barriers by district authorities	13.6	22.2	2.9	0.0	10.1

In our opinion, the assessments of the municipalities’ heads of the European North of Russia largely reflects the situation typical for other municipalities of the country, since the existing problems in the organization of inter-municipal cooperation largely arise due to the unsettled nature of these issues in federal legislation, limited powers and financial resources of local governments, lack of highly qualified cadres.

Next, we will present a general model (algorithm) for determining the feasibility of intermunicipal cooperation ( Fig. 1 ) and choosing its form (based on the above criteria).

An alternative to cooperation can be the transformation of municipal districts into municipal and urban okrugs (if there are large urban settlements on the territory of the district), as well as the unification of individual settlements of districts (in this case, when the settlement level is eliminated, the possibility of cooperation between settlements is eliminated). At the same time, when converting districts into okrugs, merging settlements, it is desirable to fulfill all the criteria indicated in Figure 1 for the implementation of such transformations. In turn, when organizing inter-municipal cooperation, it is enough to have compliance with several criteria. Further, it is advisable to calculate the economic effects (their types are shown in Figure 1) and other effects from the transformation of municipalities or the organization of inter-municipal cooperation.

		Figure 1. Model (algorithm) for determining the feasibility of inter-municipal cooperation and choosing its form
	Transformation of municipal districts into municipal okrugs and urban districts (with the abolition of urban and rural settlements of the transformed districts	Forms of contractual and economic cooperation between municipalities					Unification of municipalities (settlements, districts, settlements with an urban okrug)
		Agreements on cooperation between municipalities:			Establishment of intermunicipal commercial (in the form of NGO, LLC) and non-profit organizations (in the form of ANO and foundations)
		- on transferring full-power along the line “settlementdistrict”, “districtsettlement”	- on the implementation of joint long-term projects, provision of services by one municipality to another It is possible to us of horizontal subsi	- on the implementatio n of joint activities, the formation of joint working bodies (groups) the mechanism dies
							Criteria for determining the feasibility of such transformations: 1)    the presence of common borders of municipalities; 2)    the number of inhabitants of individual settlements is less than 500 people; 3)    the number of rural and urban settlements in the area of 5 or more units; 4)    significant differences in the potential and level of development of settlements of the district, the presence of separate sufficiently developed settlements
					Criteria for determining the feasibility of such cooperation: 1) availability of sufficient resources, organizational base in the field of housing and communal services, road facilities, etc. in one of the municipalities 2) willingness to participate in the establishment of the organization by at least three settlements or districts (okrugs)
	Criteria for determining the feasibility of such transformations: 1) the number of residents of the district is less than 10 thousand people; 2)    a small number of rural and urban settlements in the district (2–4); 3)    low overall level of development district
		Criteria for determining the feasibility of such cooperation: 1)    insufficiency of own financial resources of individual municipalities; 2)    the need to increase the efficiency of activities and the exhaustion of internal resources of such an increase; 3)    the need to improve the quality and expand the types of public services provided to the population organized by local self-government bodies; 4)    lack of highly qualified personnel in municipalities; 5)    the presence of intermunicipal brands, stable various links between municipalities, including within the framework of urban agglomerations
	Calculation of the effects of transformations: 1) savings due to the liquidation of settlement management bodies; 2) changes in the revenue and expenditure base of local budgets; 3)    cost savings for the execution of the powers of the LSG bodies; 4)    cost savings of municipal institutions of the new municipality
							Calculation of transformations effects: 1)    savings due to the liquidation of settlement management bodies; 2)    changes in the revenue and expenditure base of local budgets; 3)    cost savings for the execution of the powers of the LSG bodies; 4)    cost savings of municipal institutions of the new municipality
					Calculation of the effects of such cooperation: 1)    cost savings on the execution of the powers of the LSG bodies when transferring the relevant functions to the inter-municipal organization; 2)    profit from the activities of an intermunicipal non-profit organization
		Calculation of the effects of such cooperation: 1)    cost savings on the execution of the powers of the LSG bodies; 2)    saving the costs of the LSG bodies for the implementation of joint projects, activities 3)    possible increase in tax and non-tax revenues to local budgets from the implementation of joint projects, enterprises

Source: own compilation.

It should be noted that when municipal districts are transformed into municipal and urban okrugs, it is advisable to leave 2–3 positions of employees in each of the abolished settlements (they will be listed as employees of the local administration of the newly formed municipality) who will work with the population directly on the ground, coordinate the implementation of measures and projects for the development of territories, perform functions (part of functions) in the field of land relations, etc.

As for the possible transformation of municipal districts into municipal okrugs, there are 12 municipal districts with a population of less than 10 thousand people in the territory of the European North. (from 2 to 12 settlements have been formed on their territory; Tab. 9). We should note that over the past 10 years (2010–2020), the population has decreased more noticeably in such municipalities than in other districts of the corresponding region; they also have the highest expenditures on national issues (the functioning of local selfgovernment bodies) per 1 inhabitant. Accordingly, it is necessary to consider the possibility of converting these municipal districts into municipal districts with justification of the effects, determination of the structure and staffing of local self-government bodies planned for the creation of a new municipality, the number of municipal institutions and organizations.

Tables 10–12 present the characteristics of the budgets of the merged municipalities and new, already united rural settlements on the territory

Table 9. Characteristics of municipal districts of the regions of the European North of Russia with a population of less than 10 thousand people

Municipal district’s name Permanent population at the end of the year, people Expenses of the local budget for NI* in 2020, thousand rubles Number of urban settlements in the district Number of rural settlements in the district 2010 2015 2020 2020 to 2010, % All districts of the Republic of Karelia 351533 322715 298087 84.8 3.4 22 85 Kalevalsky 8267 7063 6489 78.5 8.3 1 3 Muezersky 12199 10535 9241 75.8 4.6 1 7 All districts of the Komi Republic 348460 321689 300477 86.2 5.3 14 145 Koigorodskiy 8393 7630 7152 85.2 6.6 0 8 All districts of the Arkhangelsk Oblast 447828 399898 364708 81.4 3.9 20 157 Vilegodsky (municipal okrug since September 30, 2020) 11097 9956 8961 80.8 6.6 0 6 Leshukonsky 7929 6805 5840 73.7 9.9 0 6 Mezensky 10305 9241 8127 78.9 13.4 2 10 All districts of the Vologda Oblast 578254 548544 523457 90.5 4.3 21 158 Vashkinsky 8010 7035 6379 79.6 7.7 0 3 Mezhdurechenskiy 6057 5625 5187 85.6 8.8 0 4 Nyuksensky 9687 8789 8291 85.6 7.8 0 4 Syamzhensky 8869 8241 7824 88.2 7.0 0 4 Ust-Kubinsky 8040 7875 7445 92.6 4.5 0 4 All districts of the Murmansk Oblast 150703 140334 133044 88.3 - 13 10 Tersky 6250 5420 5091 81.5 - 1 1 * NI – national issues (functioning of local self-government bodies). According to: Database of municipalities’ indicators. Federal State Statistics Service of the Russian Federation. Available at: https://www. / (here and in Tables 10–12). of three municipal districts of the Vologda and Arkhangelsk oblasts. According to the presented data, it can be concluded that after the transformation, the share of own (tax and nontax) revenues of the local budget in the united municipality has increased markedly in comparison with the average value of these indicators for the combined settlements; the total amount of budget expenditures per 1 resident has also increased. At the same time, unit expenditures on national issues and the national economy have been reduced (it is in these areas that the effects of cost savings are directly manifested due to the centralization of functions as a result of the unification of settlements), which allowed to increase expenditures in other areas (housing, culture, social policy), which go directly to meeting the needs of residents, providing them with appropriate services, and not for direct financing of local governments or municipal institutions.

Table 10. Budget characteristics of the combined settlements and the new rural settlement of Sheksninsky Municipal District of the Vologda Oblast

Rural settlement’s name	Share of OI*, %		E, thousand rubles		NI, thousand rubles		NE, thousand rubles		HCS, thousand rubles		C, thousand rubles		SP, thousand rubles
	2019**	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020
Nikolskoye	67.7	-	9.6	-	4.0	-	0.6	-	2.8	-	1.8	-	0.1	-
Yurochenskoye	18.2	-	18.1	-	9.2	-	0.8	-	4.2	-	2.9	-	0.4	-
Nikolskoye	56.9	74.9	10.7	11.5	4.7	4.1	0.64	0.63	3.0	4.2	1.9	2.1	0.18	0.27
Designations (here and in Tables 11–12): *Share of OI – the share of own (tax and non-tax) income in the total volume of local budget revenues; E – local budget expenditures per 1 resident; NI – expenditures on national issues per 1 resident; NE – expenditures on the national economy per 1 resident; HCS – expenditures on housing and communal services per 1 resident; C – expenditures on culture, cinematography per 1 resident; SP – expenditures on social policy per 1 resident. A rural settlement formed as a result of the merger of the two above-mentioned settlements is highlighted in bold. ** For 2019, the values of indicators for the settlements that existed at that time and on average for the two settlements that formed a new united settlement in 2020 are presented.

Table 11. Budget characteristics of the merged settlements and the new rural settlement of Vinogradovsky Municipal District of the Arkhangelsk Oblast

Rural settlement’s name	Share of OI*, %		E, thousand rubles		NI, thousand rubles		NE, thousand rubles		HCS, thousand rubles		C, thousand rubles		SP, thousand rubles
	2019*	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020
Kitskoe	13.3	-	9.2	-	3.6	-	0.8	-	4.5	-	0.1	-	0.0	-
Bereznikovskoe	35.8	-	12.4	-	1.2	-	3.0	-	2.6	-	5.3	-	0.1	-
Bereznikovskoe	34.6	45.6	12.2	9.3	1.40	1.42	2.9	2.1	2.8	2.3	4.9	3.2	0.05	0.05
A rural settlement formed as a result of the merger of the two above-mentioned settlements is highlighted in bold. * For 2019, the values of indicators for then existing settlements are presented on average for two given settlements that formed a new united settlement in 2020.

Table 12. Budget characteristics of the merged settlements and the new rural settlement of Nikolsky Municipal District of the Vologda Oblast

Rural settlement’s name	Share of OI*, %		E, thousand rubles		NI, thousand rubles		NE, thousand rubles		HCS, thousand rubles		C, thousand rubles		SP, thousand rubles
	2018*	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019
Permasskoye	12.9	-	6.7	-	3.6	-	0.7	-	0.7	-	1.3	-	0.1	-
Krasnopolyanskoye	26.6	-	4.5	-	1.3	-	1.0	-	0.7	-	0.9	-	0.1	-
Krasnopolyanskoye	24.1	17.7	4.8	6.2	1.6	1.4	0.93	0.86	0.7	2.5	0.93	1.10	0.06	0.06
A rural settlement formed as a result of the merger of the two above-mentioned settlements is highlighted in bold. * For 2018, the values of indicators for then existing settlements are presented on average for two given settlements that formed a new united settlement in 2019.

As evidenced by world and Russian practice, similar budgetary effects will be observed during the transformation of municipal districts into okrugs, the establishment of inter-municipal organizations, the conclusion of agreements on the transfer of powers of rural settlements to the district level, agreements on the provision of “horizontal subsidies” for co-financing of individual activities, projects or the provision of services by another municipality.

Using the results of the study and its further prospects

The study of the experience of municipalities’ interaction in Russia suggests that it is carried out in a variety of forms (functioning of various associations of municipalities, exchange of experience, holding joint meetings, signing and implementation of cooperation agreements, agreements on the transfer of powers, the establishment of joint intermunicipal organizations, etc.). However, such a most promising and cost-effective form of intermunicipal cooperation as the creation of intermunicipal commercial and non-profit organizations has not yet become widespread due to a number of reasons (factors), which include the lack of clear regulation of this sphere in Russia (131-FZ indicates only the general foundations of intermunicipal cooperation); regulatory, organizational and financial difficulties arising when establishing contractual relations and economic interaction of municipalities.

In our opinion, for the inter-municipal cooperation development, it is first of all necessary to develop and adopt the federal law “On intermunicipal cooperation and on amendments to certain legislative acts”. In a special federal law, it is advisable to fix the goals and objectives, the main forms of inter-municipal cooperation, the procedure for implementation, and evaluation of effectiveness. The settlement of these issues in a separate federal law will allow regulating all the legal bases for the organization of such cooperation in detail. In turn, the inclusion of a separate expanded section on inter-municipal cooperation in the 131-FZ would take up a significant part of it if the law on local self-government is retained in the future, but not the adoption of the municipal code instead of it – the code for the development of the local self-government system in Russia, as proposed by a number of experts. Adoption of Separate Law 224-FZ dated July 13, 2015 “On publicprivate partnership, municipal-private partnership in the Russian Federation and amendments to certain legislative acts of the Russian Federation” nevertheless allowed creating certain prerequisites for the development of complex management institutions (which, of course, include intermunicipal cooperation) in a specific legal framework.

In addition to the adoption of a separate law on inter-municipal cooperation, in our opinion, the state authorities together with local self-government bodies should:

– determine the optimal forms of cooperation between municipalities in solving various issues of local importance and performing the functions of local self-government bodies;

– ensure an increase in the financial and economic independence of local budgets, so that they are formed mainly at the expense of their own revenue sources, and not revenues from higher budgets, the possible instability of which does not allow local governments to plan the implementation of large long-term projects, including joint ones with other municipalities;

• –    form an open and regularly updated database of the best practices of inter-municipal cooperation in Russia and the countries of the world;

• –    implement professional development programs for employees of local self-government bodies in this area;

• –    improve the quality and completeness of official statistics in the context of municipal entities, so that the authorities have objective and reliable

information about the state of municipalities and the needs for certain resources, possible areas of interaction with other territories.

The All-Russian Association for the Development of Local Self-Government6 has also proposed separate recommendations for the development of inter-municipal cooperation:

• 1)    to work out the issues of legal personality of municipalities and their bodies in matters of establishing business companies; to create a system of motivation and incentives for municipalities to use forms of inter-municipal cooperation in order to improve the efficiency of human capital management, municipal resources and budget expenditures;

• 2)    consider the possibility of creating intermunicipal state and (or) budgetary institutions of the social sphere (culture, education, demography, healthcare, social protection of the population), providing for the possibility of forming a network of branches of intermunicipal institutions;

• 3)    to endow the very concept of intermunicipal economic cooperation with signs of project activity (in this case, such cooperation will

include the interaction of municipalities in which the parties conclude an agreement on achieving certain results in certain terms with certain resources from certain sources, agree on their rights and obligations, choose control mechanisms, conditions and forms of responsibility; an inter-municipal project aimed at providing the population with specific life benefits can become a mechanism for the implementation of inter-municipal economic cooperation).

The ideas and recommendations proposed in the article are partly polemical in nature, which opens up opportunities for further discussions on the issues under consideration. Thus, the contribution of the research, the results of which are presented in this article, to the development of theoretical science is to substantiate the model (algorithm) for determining the feasibility and choice of the form of inter-municipal cooperation, and the contribution to the development of applied science is to identify trends and problems in the development of inter-municipal cooperation in Russia (including using the results of a questionnaire survey of municipalities’ heads).