Retrospective Experience of Creating a Financial Security Cushion for Territorial Entities in Russia

Abstract

The analysis of the evolutionary development of local budgets revenue and spending at the turn of XIX and XX centuries allows us to abandon the point of view that has become familiar to Russian economic literature about the traditional and unconditional priority of the state’s economic interests over the economic and social interests of local territorial communities in Russia. The study of the process of formation of Zemstvo and city finances leads us to the conclusion that in retrospect there was a significant independence of territorial government bodies from the General system of state administration. The article presents the facts of the existence in Russia of a system of local taxes and property sources of income that ensure the financial independence of territorial entities. The article clearly shows that at the turn of XIX and XX centuries in Russia local administration structures were based on traditions similar to the principles of independence and self-sufficiency of local self-government systems widely used in modern practice in democratic countries.