ISSN 0798 1015

Vol. 38 (Nº 48) Year 2017. Page 6

Institutions for coordination of interregional economic relations in the Russian Federation: Current status and prospects

Instituciones de coordinación de las relaciones económicas interregionales en la Federación de Rusia: situación actual y perspectivas

Petr Iosifovich BURAK 1; Victor Grigorevich ROSTANETS 2; Vitalii Vladimirovich ALADIN 3; Anatolii Vasilevich TOPILIN 4; Irina Sergeevna ANDROSHINA 5

Received: 12/06/2017 • Approved: 30/06/2017

Content

1. Introduction

2. Methods

3. Analysis results

4. Discussion and Recommendations

5. Conclusion

Acknowledgements

References

1. Introduction

The functioning of the economy of Russia, as a federal state, whose subjects have extensive rights and opportunities of economic development coordination, presupposes the existence of large-scale and intensive interregional ties in all areas and spheres of economic life.

Horizontal economic ties between the regional economic complexes do not only strengthen the country's economic space, but also make it possible to integrate and more effectively use material, natural, administrative and intellectual resources of the neighboring territorial entities.

The processes of interregional cooperation seem to be one of the main, still unused, resources to intensify the economic life at the regional level in Russia amid the global economic crisis and foreign economic sanctions against our country. Thus, the academician A.I. Tatarkin, speaking about the prospects of the national development in its spatial aspect, underscored the highest priority of "interregional integration and cooperation, including through the formation of interregional cluster associations, innovation centers, technology platforms, production and scientific-educational centers for collective use" (Tatarkin 2016).

Regional economic cooperation is impossible without relevant coordination institutions. To date, the Russian Federation has developed a multilink system of interregional state and public structures that coordinate the economic cooperation and integration of the Russian Federation, including the structures at several levels – from federal to municipal ones.

In our country, the birth of new governance institutions, inherent in a market economy, takes place through trial and error. The initiative for the formation of numerous coordination structures, as a rule, comes from below, when the federal authorities do not react in time to the changed conditions of management and economic development. An example of such an initiative was the creation of interregional associations of economic cooperation between the subjects of the Russian Federation, which began to emerge in the early 1990s in the face of an acute economic crisis and reduction of economic relations of the regions of the Russian Federation. However, the federal districts were formed almost ten years later – in 2000. In other words, interregional associations, as public structures, anticipated the formation of new governmental authorities of territorial administration. At the same time, it is obvious that formation of a system of government and public institutions influencing the development of interregional cooperation is far from being completed.

2. Methods

Theoretical and practical aspects of the development of economic interactions between territorial entities at various levels (macroregions, regions, localities) are an important subject of research chosen by Russian economists and those of their international colleagues. Interregional economic interactions are the subject of the works of such well-known researchers as Perroux, Myrdal, Grubel & Lloyd (Perroux 1961; Myrdal 1957; Grubel & Lloyd 1975). Their theoretical arguments and approaches are fundamental in this field. Among the Russian scientists, the issues of regional development and interregional relations are reflected in the works of Nekrasov, Granberg, Shtulberg, Leksin, and Lyubovnyi (Nekrasov 1978; Granberg 2004; Shtulberg & Vvedenskii 2000; Leksin & Shvetsov 1997; Lyubovnyi 2013).

The issue of interregional structures for coordination of economic development of Russian regions in a market economy has attracted the attention of Russian scientists and specialists back in the mid-1990s. In the context of the economic crisis, painful structural and institutional reforms, interregional structures were considered as a possible means of mitigating crisis phenomena, preventing the collapse of the national economy. Scientific studies on the problems of interregional coordination of economic development in the period of 1995-2005 were actively carried out by such Russian researchers as Gorbunov, Klapko, Poparenko, Rukina, and Seliverstov (Gorbunov 2000; Klapko 2002; Poparenko 2003; Seliverstov 1999). However, in 2005-2015, the attention to this topic has significantly weakened. In that connection, we can only note the work of Burov (2008), containing a detailed analysis of the activities of public institutes coordinating the economic development of the regions. In recent years, the interest in the study of interregional governance institutions has been reviving, primarily among the legal scholars (Khabibullina, & Nurutdinova, 2012; Gubeidullin 2014).

In the meantime, the accumulated experience of the functioning of Russian federalism, the implementation of municipal reform, as well as a fundamentally new economic situation in the country since 2014 (crisis in commodity markets along with foreign economic sanctions), in our opinion, require the intensification of scientific research and practical actions for the formation and institutionalization of interregional economic development coordination authorities, as a possible instrument for the implementation of import substitution policy, development of the eastern regions and homogenization of the Russian economic space.

3. Analysis results

We will analyze the development of institutions for coordinating of economic ties between the regions of the Russian Federation for the period of 2006-2016 based on their typology proposed by Rostanets & Topilin (2006). As of 2006, Russia had the following institutions coordinating interregional economic relations:

Institutions created by the federal executive authorities:

 - administrative apparatus of the plenipotentiary representatives of the President of the Russian Federation in federal districts;

 - public councils under the plenipotentiary representatives of the President of the Russian Federation in federal districts.

Institutions created by the regional executive authorities:

 - interregional associations of economic interaction of subjects of the Russian Federation (associations: "Siberian Agreement", "Central Black Earth", "North-West", "Big Volga", "North Caucasus", "Great Urals", "Far East and Transbaikalia");

 - joint administration authorities of subjects of the Russian Federation (Joint Board of the Executive Authorities of Moscow and the Moscow Region, Council of Governors of the Tyumen Region, the Khanty-Mansi Autonomous Area, the Yamalo-Nenets Autonomous Area).

Institutions created by the regional legislative authorities:

 - parliamentary associations within the framework of federal districts (Parliamentary Association of the Northwestern Federal District, South-Russian Parliamentary Association, Association of legislative bodies of the Volga Federal District, Parliamentary Center of the Ural Federal District);

 - joint commissions of legislative bodies of the neighboring regions (Joint Commission of the Moscow City Duma and Moscow Region Duma).

Institutions created by the business community and other public associations:

- Interregional associations of chambers of commerce and industry and business associations (Union of Chambers of Commerce and Industry of the Central Federal District; Coordination Council of Associations of Industrialists and Entrepreneurs of the Central Federal District, Association of Banks of the North-West Russia).

We cannot fail to note that in the period of 1995-2005 there was a unique joint management structure formed by the administrations of St. Petersburg and the Leningrad Region. We are talking about the Horticulture and Gardening Development Authority for St. Petersburg and the Leningrad Region. This structure was financed jointly by the two subjects of the Russian Federation at the expense of budget funds, and had a single staff which was formed on a pro rata basis from the representatives of the city and the region. Unfortunately, the experience and operational challenges of such a joint executive body have not been addressed in the media or become the subject of a proper analysis on the part of scientists and specialists.

What changes in typology and structure of institutions for coordination of interregional economic relations of regions of the Russian Federation have taken place during the last ten-year period (2006-2016)? A number of new institutions for coordination of regional development have been created at the federal level in recent years. Thus, in 2011, the Coordination Council for the Development of Transport System of St. Petersburg and the Leningrad Region started its work. The Coordination Council, which is approved by the Government of the Russian Federation, includes representatives of the Ministry of Transport of the Russian Federation, the Ministry of Internal Affairs of the Russian Federation, the Ministry of Natural Resources and Environment of the Russian Federation, the Ministry of Finance of the Russian Federation, the Government of St. Petersburg, the Government of the Leningrad Region, state institutions and government departments; scientific, project and public organizations; as well as business representatives. The Chairman of the Coordination Council is the Minister of Transport of the Russian Federation.

The Coordination Council operates in accordance with the Program of Development of Transport System of St. Petersburg and the Leningrad Region for the period up to 2020. The Council performs the following basic management functions:

 - organizes an assessment of the effectiveness of transportation on the territory of St. Petersburg and the Leningrad Region;

 - reviews proposals of the federal executive bodies, executive authorities of St. Petersburg, the Leningrad Region, other subjects of the Russian Federation; public, scientific and other organizations on the formation and implementation of state policy in the field of development of transport infrastructure and traffic management;

 - determines the priority activities to prevent and eliminate the causes of difficulties in the movement of vehicles and improve the quality of work of the transport organization, including the subway, which carry out scheduled passenger operations in the city and the suburbs;

 - prepares proposals for the development of federal targeted programs, as well as programs of St. Petersburg and the Leningrad Region, concerning the issues of development of transport infrastructure and traffic management;

 - considers the justifications for financial and logistical resources for implementation of measures on the development of transport infrastructure and traffic in St. Petersburg and the Leningrad Region.

Council decisions taken in accordance with its competence are mandatory for the federal executive bodies and executive authorities of St. Petersburg and the Leningrad Region.

Over the last decade, institutions for coordination of economic issues have been developed at the level of the federal districts, formed under the plenipotentiary representatives of the President of the Russian Federation in the districts. For example, in 2010 the Coordination Council was established under the plenipotentiary representative of the President of the Russian Federation in the Siberian Federal District on implementation of investment projects in the Republic of Buryatia and the Trans-Baikal Territory. The council was formed of the heads of executive and legislative bodies of the Republic of Buryatia and the Trans-Baikal Territory, representatives of federal authorities, large industrial enterprises, energy and transport. The Chairman of the Coordination Council is the plenipotentiary representative of the President of the Russian Federation in the Siberian Federal District.

The main objectives of the Coordination Council were defined as follows: promotion of priority investment projects for these regions, development of measures to support investors, and promotion of innovative solutions in the creation of new infrastructure and production facilities. In December 2012, the area of activity of the Coordination Council was expanded due to the inclusion of the Irkutsk Region in its structure. The new structure was called the Coordination Council under the plenipotentiary representative of the President of Russia in the Siberian Federal District for the implementation of investment projects in the Baikal region. And finally, in 2014, the council was transformed into an even broader structure on the matter of its activities – the Coordination Council under the plenipotentiary representative of the President of the Russian Federation in the Siberian Federal District for socio-economic development of the Baikal region.

There is one more coordination institution in the Northwestern Federal District – the Coordination Council for the Development of Construction Industry. The Council is a collegial advisory body under the Office of the plenipotentiary representative of the President of the Russian Federation in the Northwestern Federal District and consists of representatives of the executive branch and local business community. The Coordination Council was established in order to ensure coordination of activities in the sphere of implementation of state policy in the construction industry of state authorities of the constituent entities of the Russian Federation located within the Northwestern Federal District, territorial authorities of the federal executive bodies, local self-government authorities, self-regulating organizations in the field of construction and design, other public associations and organizations of the construction industry. The areas of work of such institutions and their number by the beginning of 2017 are summarized in Table 1. 

Table 1. Coordination institutions created under the plenipotentiary representatives
of the President of the Russian Federation in federal districts (as of 01/01/2017)

During the period under review, forms of interaction between the regional legislators have expanded. In those federal districts, where there were no parliamentary associations, the so-called Councils of Heads of legislative bodies of the subjects of the Federation were established as an alternative to interregional parliamentary associations. In the Central Federal District, this body is called the Council of Legislators, but in its composition and functions it is similar to the Councils of Heads. As of 2016, five federal districts have parliamentary associations, and three federal districts – Councils of Heads of legislative bodies. Undoubtedly, the creation of Councils of Heads of legislative bodies in those macroregions with no interparliamentary structures is a clear step forward. However, it appears that coordination activities of narrow in composition Councils cannot fully substitute for large-scale business contacts and collaboration of regional legislators, possible within the framework of parliamentary associations.

At the same time, in 2006-2016, no progress or dissemination had been made on such form of coordination of the regional parliaments' activities as a joint commission of legislative bodies of the neighboring regions. Of the 85 subjects of the Russian Federation, only Moscow and the Moscow Region have such a joint body, although the problems of coordinated interaction between megacities and the surrounding areas exist in other regions of the Russian Federation.

Councils of young regional legislators have become a qualitatively new structure for coordinating interregional relations in our country. In 8 federal districts, the Coordination Councils of Youth Parliaments have been established, whose purpose is to promote the development and ensure the interaction of youth parliamentary structures operating in the regions of the Russian Federation, upgrading professional skills and activity of the young parliamentarians, and establishing a broad dialogue with the non-parliamentary community. The point is that regional youth parliaments consist not only of deputies of the regional dumas and legislative assemblies, but also of the municipal level deputies, as well as of representatives of public organizations. Thus, youth parliaments and their interregional associations are mixed structures that unite representatives of civil society and legislators of various levels.

Youth parliaments are active not only in the affairs of youth, but also in matters of economic policy. Thus, the Public Youth Chamber under the State Council of the Republic of Tatarstan has the following commissions: on labor, employment and innovative development; on external relations and information development; on legal issues and regional interaction (State Council of the Republic of Tatarstan, n.d.). In general, it appears that the effectiveness of the youth legislators and their unions in coordination of regional and local economic development will depend on the extent of their participation in the development and review of regional programs, social projects, and support for youth entrepreneurship.

A certain progress has been made in 2006-2016 regarding the coordination structures, formed by regional executive authorities of the Russian regions with intensive social and economic ties (Moscow – the Moscow Region, the Moscow Region – the Tver Region, St. Petersburg – the Leningrad Region). We are talking about joint boards, coordinating councils, working groups and commissions. For example, in 2012, the Coordination Council of St. Petersburg and the Leningrad Region in the field of socio-economic development was established. The Council reviews and solves a wide range of issues relevant to the city and region. For example, in 2015 the Council decided on the establishment of unified transport tariffs for the population, provision of city and regional residents with MFC (multifunctional centers) services, joint financing of energy projects.

Finally, it is necessary to note the increase in the total number and expansion of the sectoral spectrum of interregional and intermunicipal unions and business associations.

An important institution of interregional cooperation in modern Russia is contracts and agreements entered into between the executive and legislative bodies of the region. The number of such agreements in each subject of the Russian Federation consists of a few dozens. For example, as of 2016, the Legislative Assembly of the Leningrad Region has 26 agreements on cooperation with other regional parliaments, the Moscow City Duma – 30 agreements, the Legislative Assembly of St. Petersburg – 21 agreements, the Legislative Assembly of the Rostov Region – 5 agreements, etc. Contracts and agreements are also entered into between the parliamentary associations. Regional administrations are even more active when it comes to the treaty process. The Kostroma Region has 62 agreements on trade and economic, scientific, technical and cultural cooperation with other regions of the Russian Federation. The Rostov Region has signed agreements on interregional cooperation with 57 subjects of the Russian Federation. As of 2014, the administration of the Sverdlovsk region had agreements on cooperation with 73 subjects of the Russian Federation (Ministry of Industry and Science of the Sverdlovsk Region, n.d.).

However, it should be noted that most of the interregional agreements were concluded in the 1990s, when the regions were actively looking for mechanisms to overcome the economic consequences of the USSR collapse. In subsequent years, the intensity of formation of contractual relations between the regions has decreased. For example, in the Sverdlovsk Region, 60% of all the existing agreements were concluded before 2000, in the Rostov Region – only 20% of all the agreements were concluded in the period of 2010-2015. It is obvious that today an array of treaties and agreements concluded between the regions of the Russian Federation requires actualization in accordance with the realities of the country's economic life, the needs of import substitution and overcoming of external sanctions.

Despite this, the effectiveness of contracts as a form of interaction between regions cannot be underestimated. It is important to overcome the main problem of the treaty interregional interactions – the lack of clear regulations on the implementation of selling, blurring targets, inability to assess the effectiveness of the final contracts. Such options as increased control of the contractual relations implementation, personification of responsibility and formation of temporary working structures for their implementation could become the factor in increasing the effectiveness of the contractual relations. These temporary structures could be working groups and committees at the regional administrations. The practice of forming working groups became widespread in the Khanty-Mansiysk Autonomous Okrug – Yugra and the Leningrad Region.

Thus, based on the assessment results of the evolution of interregional structures in the period of 2006-2016, to some extent ensuring the interregional interaction of the subjects of the Russian Federation, it can be stated that a new type of institutions for coordination of interregional relations has emerged – the Coordination Councils of the Youth Parliaments, as well as a number of new specific working forms of interaction. Several institutions (interregional treaties, interparliamentary associations) are widely disseminated, which makes the coordination process more diverse and large-scale, involving new social groups. At the same time, it should be noted that a number of institutions for coordination of interregional cooperation have not received further development over the past decade (such as councils of regional governors or joint parliamentary commissions of regional parliaments).

The increase in the number of coordination structures of the economic profile created at the level of the federal districts under the plenipotentiary representatives of the President of the Russian Federation, in our opinion, has clearly indicated the trend of the evolution of the institution of plenipotentiary representatives of the President in the federal districts from the control and supervisory body to the institution for implementing social and economic policy and coordination of interregional relations within the macroregions of the country.

4. Discussion and Recommendations

Looking ahead, in our opinion, new institutions for coordinating the socio-economic development of the subjects of the Russian Federation, for their economic integration will arise for the following objective reasons, immanent to the Russian economy:

- to develop and implement the new federal strategy for regional socio-economic development and other strategic planning elements, aimed at overcoming the obvious and destructive nature disparities in the level of development of individual constituent entities, constituting our country;

- to ensure consolidation of the national economic space and intensification of all types of economic ties between the regions of the Russian Federation (Vardomskii, 2009; Gagarina, 2012; Grishin, & Gagarina, 2013; Topilin, Rostanets, & Kabalinskii, 2015);

- due to the need to consider the real features and traditional ties of the major historical economic regions of the country in governance;

- in the course of the convergence of the interregional and intermunicipal cooperation between the territorial-administrative entities that form the Russian Federation (Rostanets, & Topilin, 2015);

- in the course of the possible association (consolidation) of territorial and administrative entities that form the Russian Federation.

The attempts to design new organizational management structures without having a clear concept of long-term regional development and the objective needs of the regions in economic integration are doomed to failure. This was confirmed several times in the Russian history of the end of the 20th century and the beginning of the 21st century.

In our opinion, a complex and consistent consideration of the above imperatives of the formation and development of interregional coordination structures will make it possible to create a much-needed to our country hierarchically structured system of interregional development coordination authorities, effectively complementing the federal economic management structure.

As a first step within the framework of such a system, in our opinion, it is expedient to form and develop joint (associated) executive and legislative authorities for the neighboring regions of Russia of the following types:

- regions with mature close and wide-ranging socio-economic relations (Moscow – the Moscow Region, St. Petersburg – the Leningrad Region);

- regions with a serious gap in the level of social and economic development (Krasnoyarsk Krai – the Republic of Khakassia, the Republic of Tyva);

- regions in need of intensification of economic growth and strengthening of economic ties with the main territory of the country (Primorskiy Krai, Kamchatka, Khabarovsk Krai, the Amur Region, the Sakhalin Region);

- regions participating in the implementation of major economic mega-projects of the national and international scale (transport corridors "east-west", "north-south", projects for development of biggest fields and deposits of natural raw materials, etc.);

- regions carrying out economic cooperation with the border regions of foreign countries (Kazakhstan, China, Mongolia).

The existence of such bodies will make it possible to take coordinated decisions on the strategy for their long-term development, creation of transport infrastructure and energy, reforming of housing and communal services, migration management, and implementation of large investment projects on the basis of multilateral concession agreements.

            As one of the mechanisms to level the economic development and living standards in the subjects of the Russian Federation, experts consider scientifically based strategic territorial planning at the level of regions and macroregions of the country (Bukhvald 2015; Leksin, & Shvetsov, 2006; Seliverstov, 2013; Burak 2014; Vlasyuk & Minakir 2013). The Federal Law No. 172-FZ "On Strategic Planning in the Russian Federation", which entered into force on July 11, 2014, includes the development of strategies for the socio-economic development of macroregions, as well as strategies and programs for socio-economic development of the subjects of the Russian Federation. The text of the law defines the macroregion as "part of the territory of the Russian Federation, comprised of the territory of two or more subjects of the Russian Federation, the social and economic conditions of which require allocation of separate directions, priorities, goals and objectives of social and economic development in the development of strategic planning documents".

To date, regional strategies and programs have been formed and are being implemented in all the 85 constituent entities of the Russian Federation. Strategies for the macroregions are developed in the scales of federal districts of the country (Strategy of Social and Economic Development of the Far East and Baikal region for the Period up to 2025, Strategy of Social and Economic Development of the Central Federal District for the period till 2020, etc.). At the same time attention is drawn to the practical absence of strategic planning documents covering two or three neighboring constituent entities of the federation, i.e. "interregional strategies". The need for such strategic developments, coordinating the development of two or three neighboring territories, is obvious. Such strategic forecasting documents could be drawn up by the interregional coordination structures, joint bodies of executive power of regions, and similar institutions.

What should be the consistency of the formation of interregional economic management structures? It appears that depending on the specific economic situation and political will of the elites of the interacting regions, it is possible to form joint management structures on the "top-down" principle or, on the contrary, on the "bottom-up" principle. In the first case, we propose the following sequence of formation of coordination structures:

- formation of joint commissions of legislative bodies of the neighboring regions for regulatory and legislative support of collaborative processes;

- creation of a joint board of the regional executive authorities on strategic planning and economic policy;

- creation of joint boards of the regional executive authorities on specific areas of cooperation – transport, engineering infrastructure, environment, and social policy;

- establishment of joint financial institutions and business entities.

In the second case, the sequence of regional convergence can be as follows:

- formation of joint committees of legislative bodies of the neighboring regions for the regulatory and legislative support of collaborative processes;

- creation of joint boards of the regional executive authorities on specific areas of cooperation – transport, engineering infrastructure, environment, and social policy;

- establishment of joint financial institutions and business entities;

- creation of a joint board of the regional executive authorities on strategic planning and economic policy.

Formation of interregional development coordination institutions can be seen as a first step in achieving the highest form of interregional integration – amalgamation of regions. Amalgamation of regions is a long and complex process, and as rightly pointed out by the famous Russian scientist-regionalist V.N. Leksin "...in relation to the present, we can confidently state: the territorial structure of the state does not tolerate revolutions; its formality almost leaves no room for revolutionary upheavals" (Leksin 2003, pp. 38).

Therefore, as a first step in the process of consolidation, we would recommend the creation of joint administrative bodies by the regions considering consolidation. The development of interregional cooperation structures in the form of the Councils of Governors, joint boards of executive bodies, as well as joint commissions of regional parliaments, would undoubtedly bring together the positions of the elites of the unifying regions, help to accumulate experience of joint work and to perform profound feasibility studies of the expediency and prospects of consolidation processes. Thereby, the combined executive bodies will serve as a transitional link from two or three independent regional administrations to one single, formed as a result of consolidation process.

5. Conclusion

The presence of obvious signs of disintegration of the Russian economic space, and weakening of economic ties between the regions raises the question of finding mechanisms to overcome these unfavorable trends. One way to address the issue would be to create new institutions for coordination of interregional relations formed by the regions without participation of the federal authorities. The proposed governance bodies, embodying the local initiative and working on the basis of consensus, could perform a number of functions – from strategic planning to implementation of specific investment projects and concession agreements. It is expedient to form joint interregional bodies for managing economic development both within the legislative and the executive authorities. It is advisable to use the experience gained by associations of economic interaction between the subjects of the Russian Federation, Boards of Governors and Parliamentary Associations. In the first place, it is necessary to form interregional governing bodies at the level of the federal districts of the country, as well as for the neighboring subjects of the federation that already have large-scale economic ties, for example, for Moscow and the Moscow Region, St. Petersburg and the Leningrad Region, Sevastopol and the Republic of Crimea.

Acknowledgements

The article was prepared with the financial support of the Russian Humanitarian Scientific Foundation (project No.16-02-00188).

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1. The Institute of Regional Economic Research. Sivtsev Vrazhek Lane 29/16, Moscow, 119002, Russia. E-mail: sss2800@mail.ru

2. The Institute of Regional Economic Research. Sivtsev Vrazhek Lane 29/16, Moscow, 119002, Russia

3. The Institute of Regional Economic Research. Sivtsev Vrazhek Lane 29/16, Moscow, 119002, Russia

4. The All-Russian Academy of Foreign Trade, Ministry of Economic Development, Pudovkin Lane 4A, Moscow, 119285, Russia

5. The National Research University "Moscow Power Engineering Institute", Krasnokazarmennaya Lane 14, Moscow, 111 250, Russia