introduction
The Barents Euro-Arctic Region (BEAR) is a geopolitical area established by a Norwegian initiative in to promote international regional cooperation. It was necessitated mainly by changes in the international political and economic situation in Europe after the dissolution of the Soviet Union, accompanied by profound transformational processes and a crisis in the Russian Federation and other countries of the former USSR. The need for a new platform for international regional cooperation in Northern Europe to overcome the tension in relationships of the Cold War period, maintain political stability, and create preconditions for the sustainable development of the region had appeared. The Declaration on Cooperation in the BEAR (Kirkenes, January th, ), which was signed by the Ministers for Foreign Affairs of Norway, Finland, Russia and Sweden, as well as by representatives of Denmark, Iceland and the European Commission, was the official document calling for the establishment of the organization. In the Kirkenes Declaration () the objective of Barents-Euro Arctic Cooperation (BEAC) work was formulated as follows:
…to promote sustainable development in the Region,bearing in mind the principles and recommendations set out in the Rio Declaration and Agenda of UNCED.
The same document also expressed “support for the ongoing process of reform in Russia which aims, inter alia, at strengthening democracy, market reforms, and local institutions, and which is therefore important for closer regional co-operation.”
Thus, sustainable development issues, the successful implementation of reforms in Russia, and the strengthening of local institutions can be considered
among the priorities of Barents cooperation. In this connection, it is interesting to consider how, during the nineteen years since the foundation of the Barents Region, the process of reform in Russia has progressed in the direction of the formation of the institution of local self-government, which plays (or must play) a significant role in sustainable development. Such a role was underlined in Agenda (). Namely, chapter of the Agenda, in connection with the role of the local level and local authorities, notes:
As the level of governance closest to the people, they [local authorities]
play a vital role in educating, mobilizing and responding to the public to promote sustainable development.
In order to realize the principles of sustainable development it was recommended that all local authorities enter into a dialogue with citizens, local organizations and private enterprises in order to achieve consensus in the adoption of “a local Agenda ”, as a strategy of sustainable development in their settlements.
The observance of the principles of sustainable development in the Russian part of the BEAR is important because of its prevalence in both area and population in the Barents Region. Of the Region’s total area of . million sq.
km. and population of approximately 5.5 million people, two-thirds of both the area and the population are located within the Russian Federation (Soppela et al. , ). The Russian part of the BEAR includes such administrative territories (subjects or constituent entities of the Russian Federation) as Murmansk Oblast, Arkhangelsk Oblast, the Republic of Karelia, the Republic of Komi, and the Nenets Autonomous Okrug (AO). The latter is part of Arkhangelsk Oblast, but simultaneously it possesses the status of a subject of the Russian Federation.
formation of the institution of local self-government in russia
The institution of local self-government is one of the most significant foundations of any democratic regime. As a primary element of democracy, local self-government protects the citizens’ interests, which are determined by their living jointly on a certain territory. The European Charter on Local
Self-Government, which was ratified by the Russian Federation in , defines the concept of local self-government as follows:
Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population. (European Charter 5, Article )
The essence of local self-government determines such inalienable principles as local democracy and local autonomy. The observance of these principles creates favorable conditions for the formation of the local civil community, giving the inhabitants a sense of belonging to their place of residence, an awareness of their rights, and the ability to influence the course of life in the community and assume responsibility for it. Such conditions allow for a better use of untapped local resources and contribute to the achievement of sustainable development.
To what extent does the newly formed institution of local self-government fulfill the above-mentioned role in Russian regions as a whole and those that are part of the BEAR in particular? Historically, the institution of local self-government in Russia is a relatively new phenomenon with no long-standing traditions. The pre-revolutionary experience of local self-government, which began following the abolition of serfdom in , was interrupted by the period of soviet power, when the local administrations, together with formally elected representative bodies - local soviets (councils) of people’s deputies - were state authorities and there was a rigid subordination of local councils to higher state bodies. The stereotype formed during this period of state power as a
“monocentric” system with hierarchical co-subordination of all levels, down to the local, has remained to the present day not only among some members of the population, but also among some heads of the local authorities (Report ).
The first attempts to legitimize local self-government as an independent institution of democracy were undertaken in the final years of the USSR. But only the Constitution of the Russian Federation, adopted in , created guarantees and basic principles of local self-government. In chapter , article
of the Constitution (“Fundamentals of the Constitutional System”), the independence of local self-government within the limits of its authority is guaranteed. It is also stated that “the bodies of local self-government shall not be part of the system of bodies of state authority” (Constitution ). Along
with the basic provisions, there are some other legal foundations of local self-government in chapter of the Constitution. In particular, article states that
“Local self-government in the Russian Federation shall ensure the independent solution by the population of the issues of local importance” (ibid).
The provisions of the Russian Constitution on local self-government incline to the ideology of the so-called “Anglo-Saxon” model, which is characterized by a maximum level of autonomy of the local self-government. This initial phase of transformation in the municipal sphere is often called “the municipal revolution”. However, concrete legal forms of local self-government were not set forth in the Constitution; they were to be established later.
The launch of local self-government in Russia took place in the midst of the profound crisis associated with the transition to a market economy and socio-political transformations. The first law regulating the organization of local self-government - Federal Law No. 54-FZ “On general principles of organization of local self-government in the Russian Federation” (adopted in 5) - provided broad powers to regions in choosing the forms of local self-government. It caused not only a great diversity of the institution in different regions but even an absence of local self-government in a large part of the country. Nevertheless, in those regions where bodies of local self-government were created, as a rule, the most democratic way of electing heads of local administration – direct universal suffrage – was used. This order, along with other requirements of the law on municipal autonomy, formed the conditions for the creation of independent structures of local authorities. However, this independence often generated confrontation with new regional elites, which sought power and property, including expansion to the municipal level. As a result, such factors as () the broad powers of regional authorities to regulate local issues, which were provided by Federal Law No. 54-FZ, and () the lack of federal protection of local self-government, allowed significant restrictions on – and even, in some cases, the elimination of – the municipal authorities by the end of the s, replacing them by territorial structures of regional administrations (Gel’man et al. ;
Puzanov and Ragozina ; Report ).
Taking into account the above-mentioned problems concerning the implementation of constitutional guarantees of local self-government, as well as the urgent necessity of legally establishing the new order of power distribution between federal, regional and municipal authorities, in , after major work carried out by a specially established State commission and
wide-ranging discussions, a new Federal Law No. -FZ “On general principles of organization of local self-government in the Russian Federation” was adopted, marking the beginning of the current stage of municipal reform in Russia. The law foresaw a transitional period for its implementation up to the beginning of
; the transitional period was later prolonged to .
The new law, in contrast to the previous one, established unified regulation of forms of local self-government, substantially limiting the rights of regional authorities. In particular, the following new important provisions were added:
- the introduction of three types of municipalities - the rural or urban commune (poselenie), the municipal district (munitsipalnyi raion), and the urban district (gorodskoi okrug) - and a clear distinction in powers between the three types of local authority. Municipal districts and communes are two-level municipalities, whereas the urban district is a one-level type;
- new territorial structures and clear requirements for setting the boundaries of municipalities: the entire territory of Russia must be divided into municipalities; settlements with a population of more than people should have the status of a municipality (rural commune, etc.);
- the determination of “issues of local significance”, specified for each type of municipality16, in which the principle of freedom from supervision is applied; these issues are distinct from delegated functions, which may be financed and supervised by the central bodies delegating them.
Among the above-mentioned types of municipalities, urban districts possess the broadest range of power and resources because they combine the functions and sources of revenue shared by municipal communes and districts. Data on the distribution of different types of municipalities in the regions of the Russian part of the BEAR, along with some other characteristics of the territories, are presented in Table ..
16 “Issues of local significance” are issues that are connected with the everyday needs of the local population and financed, as a rule, from the local budget. The number of “issues of local significance” increased from about 20 for various types of municipalities according to the initial version of the law, which was adopted in 2003, to about 40 in the current version, following the introduction of a large number of amendments.
table 6.1 Populations and types of municipalities by region in the Russian part of the BEAR Source: Rosstat (2010).
As can be seen from the data, the regions of the Russian part of the BEAR have a higher level of urbanization, especially Murmansk Oblast, than the average in Russia. Despite the fact that most of the population is concentrated in urban settlements, the dominant type of municipalities by number is the rural commune. In the regions of the Russian part of the BEAR, almost all rural communes were established following the adoption of Federal Law No.
-FZ, and their bodies of local self-government were formed by early .
It is mainly due to the newly established rural communes that the total number of municipalities has increased since in Arkhangelsk Oblast by a factor of ., . in the Komi Republic, . in the Republic of Karelia, and .5 in
Murmansk Oblast. However, the acquisition by rural settlements of the new status of municipalities and the formation of local self-government bodies has not improved their socio-economic situation. The majority of rural communes in the Russian part of the BEAR are in a difficult, often crisis, situation, far from conditions of sustainable development. Since the beginning of market reforms, due to the severe downturn in agricultural production as well as in the forestry and timber industries, which provided the economic basis of most villages’ existence in the Russian part of the BEAR, their decline, which began in the Soviet period, has accelerated. For example, in the beginning of in Arkhangelsk Oblast, 5 rural settlements out of a total number of ,5 did not have a permanent population. Since the number of villages which have lost their resident population has almost doubled. Approximately % of the total number of rural settlements in Arkhangelsk Oblast had a population of fewer than 5 people, and only in 5 villages did the population exceed
people (Konstantinov ). Accordingly, the majority of the rural municipalities that currently exist in the region are formed by the territorial principle (comprising a group of small villages) and do not have a proper economic base for self-governance.
The sharp rise in the number of municipalities through the formation of a large number of rural communes has led to contradictory results. On the one hand, the creation of the primary level of local self-governance and closer interaction of the government with the population can, in principle, be regarded as a positive result of the adoption of the new Federal Law No. -FZ. For the populations of rural settlements a new tool has been created which has the potential to express and protect their socio-economic interests. On the other hand, an acute shortage of resources (human, financial, material) to carry out their functions and powers, in fact, discredits the role of the majority of rural communes and their local authorities.
Similarly, there is a more general contradiction regarding the new stage of municipal reform associated with the introduction of Federal Law No. -FZ. It concerns the declared and actual implementation of the principles of local autonomy and local democracy. On the one hand, the concept of the law declares the autonomization of local governments from state authorities. On the other hand, the policy of centralization (recentralization) of state power, which has simultaneously been implemented in the country, includes, to a large extent, the local level as well. The latter circumstance has given grounds for
some experts to consider this stage of reform a “municipal counter-revolution”
(see Kynev ; Puzanov and Ragozina ; Gel’man and Lankina ). The reason for centralization was explained as a desire to raise the efficiency of state governance. The principal means of achieving the goal was the construction of two hierarchies: () the administrative “power vertical”, according to the logic of which direct elections of the governors of the regions were abolished in
4, and () the party system, with the dominance of the “party of power”, United Russia (Gel’man ). The policy of power centralization has also been apparent in attempts to embed local governments in the chain of command.
For example, in April many branches of the United Russia party initiated a bill which would allow a unilateral transfer of certain local government powers to regional administrations, but the bill was postponed. In October
, following the defeat of a United Russia candidate in a mayoral election in a large Russian city (Samara, a regional capital), the party proposed a new bill that would lead to the abolition of local self-government as such in the regional capitals. It was suggested that the authorities of these cities could acquire the status of state bodies, whereas local self-governments could be formed at the intra-urban level, following the model of Moscow and St. Petersburg.
Although many of the most radical attempts to limit the power of local self-government have not been legalized, from the adoption of Law No.-FZ in to the end of , more than amendments to the law’s original edition were introduced.17 Such a large amount of amendments is a reflection of the enormous difficulties (institutional, legal, economic, personnel-related) hindering the implementation of the law. On the one hand, amendments to a law regulating such a complex area as the formation of local self-government in Russia were inevitable. On the other hand, the amendments introduced were often chaotic, intended largely to ensure control of regional and federal authorities over the municipalities, which were the weakest link in the hierarchy of the executive “power vertical” (Gel’man ,; Report ).
The greatest complaints from representatives of local self-government bodies and criticism from experts who have studied the problems of local self-government address the growing lack of financial resources necessary to carry out the legally determined functions and powers of local authorities. The tendency to expand the list of “issues of local significance”, which led to the
17 These amendments were contained in 43 laws on amendments and changes to Federal Law No. 131-FZ.
growth of expenditure commitments by local governments, was not supported by sufficient sources of revenue for the local budgets. In fact, there has been an opposite process of concentrating financial flows in favor of the federal budget, accompanied by declining revenues for municipal budgets. Table . presents data on the distribution of primary revenues at different levels of the budget system of the Russian Federation (excluding transfers to other budgets), as well as the proportions of expenditure of the budgets, illustrating that it is local budgets that experienced the brunt of the increase in the negative imbalance during the s.
table 6.2 Shares of revenues and expenses by different levels of budgets in the Russian budget system (before financial transfers to other budgets), %
Source: Valentey and Khabrieva 2008, 51.
A sharp drop in the share of revenues for local budgets in occurred after changes in tax and budget legislation. The number of local taxes was reduced from five to two.18 Several statutory transfers and fees paid to local budgets from federal and regional taxes were abolished or reduced. For example, fees for local budget revenues from taxes on corporate profits (a federal tax) and from property tax (a regional tax) were abolished, and statutory transfers from
18 Tax on land and tax on personal property were defined as local taxes.
personal income tax were reduced from 5% to %. As a result, the need for financial aid to local budgets has increased. This means that the ability of municipalities to fulfill their functions depends mainly on financial transfers from the regional budgets, rather than the efforts of local authorities to expand the economic potential of the territory, which determines the tax base. Thus, the share of local taxes in local budget revenues, which performs not only a fiscal but also a regulatory function, was reduced to the insignificant level of
.5% (Valentey and Khabrieva , 5-5).
A high degree of dependence on external financial assistance is typical of rural communes. In the share of budgetary transfers in the structure of their budget revenues varied from 5% to almost % in 5% of the rural communes in the country. Urban districts are relatively better provided with their own sources of funding. However, in most of the urban districts the share of financial assistance from the regional budget is comparable to or greater than the share of tax and non-tax revenues of local budgets.
A similar or even worse situation of local budgets being dependent on financial aid from regional governments exists in the regions of the Russian part of the BEAR. For example, in Murmansk Oblast in the share of intergovernmental transfers in the revenue structure of the budget of all fourteen urban districts exceeded 5%, and in seven of them the share was more
A similar or even worse situation of local budgets being dependent on financial aid from regional governments exists in the regions of the Russian part of the BEAR. For example, in Murmansk Oblast in the share of intergovernmental transfers in the revenue structure of the budget of all fourteen urban districts exceeded 5%, and in seven of them the share was more