Fiscal capacity of the city: the assessment of the influence on the sustainability of urban environment and the quality of living (the case of «second» cities of the Russian Federation)

Abstract

The modern financial situation demonstrates tough asymmetry in financial development between the territorial units, which are the capital cities, and the «second» cities of constituent units of the Russian Federation. This is based upon chronic deficit of inner financial sources for covering the budget expenditure items of the latter ones. The instruments of municipal units’ fiscal capacity level equalization, which are being implemented by the national government, lead to adverse effects. These effects of national fiscal practice include the resource dependence on the upper level and lack of interest of the «vice-capitals’» local authorities to broaden the inner income base, disbalance between economic, social, natural-resource components of urban environment’s sustainable development and the fall of the residents’ quality of living. In this connection, the effectiveness research of the current managerial mechanism of fiscal capacity of the «second» cities of constituent units of the Russian Federation in the context of the sustainable development concept is extremely important. The results of the survey on the packaged approach to economical and statistical assessment of the fiscal capacity level as a defining factor of sustainable development of the urban environment and the residents’ quality of living in «vice-capitals» of constituent units of the Russian Federation (the case of Magnitogorsk and Nizhniy Tagil) are presented in this article. Having used the packaged approach, the authors have brought to light the interconnection between the level of the «second» cities’ fiscal capacity and indicator values of ecological and socio-economic well-being of the analysed area. Additionally, they have revealed the character and direction of this connection as well as assessed the competence of management of the financial opportunities generation and usage by means of determining the indicator values of the areas’ fiscal capacity as of the current date and comparing them with optimum values.