Intergovernmental transfers and their impact on disparities’ reduction of regional development

The article is devoted to relationship assessment between intergovernmental transfers from federal to regional budgets and the growth of real incomes of the population. It was found that the Gini coefficient, which reflects the deviation of income distribution from absolute equal distribution, in the whole country and for specific entities of the Russian Federation, is slightly higher than 0.4, which, according to the World Bank, is a critical level of inequality. Thus, Russia maintains a consistently high level of interregional income inequality. By assessing the σ- and β-convergence of social and economic indicators of 74 regions of Russia in 2000-2021 it is concluded that there is a process of convergence of real per capita incomes, but the role of intergovernmental transfers in this is not obvious. A positive and significant impact was recorded mainly due to subsidies, which can be explained by their infrastructural nature. It is noteworthy that subsidies, being a direct tool for equalizing the budgetary provision of the constituent entities of the Russian Federation, which are based on a formalized calculation approach, did not have a significant impact on the growth of real incomes of the population. The contribution of intergovernmental transfers is undeniable in the case of fiscal or revenue equalization, but it is not a sustainable factor in regional growth. The model additionally included such indicators as the level of inflation, investment in fixed capital, the share of employees of state bodies and local governments in the average annual number of employees, the ratio of the employed population to the total population, the amount of assigned pensions, etc. The latter had a positive effect on the convergence of real income per capita, which is consistent with the results obtained in the research.