Rating of the Russian Regions by the Effectiveness of Social Support

One of the medium-term goals of Russian social policy is to halve poverty. In order to track progress towards this goal, a reliable data source is needed, as well as an adequate assessement tool. Also, in addition to the general dynamics of poverty headcount in Russia, it is important to see changes in poverty headcount at the regional level since social support for people in need is the responsibility of regional governments in Russia. Using data from a representative household survey conducted annually by Rosstat, the authors have proposed a methodology for ranking regions according to the effectiveness of their policies in supporting people in need. A feature of the proposed approach is that it allows for a more objective assessment of the contribution of each region’s efforts both to achieving the national goal of reducing absolute poverty and in overcoming the neediness associated with intraregional income inequality. In addition, the authors have proposed to improve the method of accounting for the income of rural households in order to take into account the contribution of personal subsidiary plots to financial situation. At the first glance, the ranking results may seem unexpected: not only economic leaders, but also the regions that are far from the richest can demonstrate the best efficiency in reducing poverty, and vice versa, a relatively high or low initial poverty level in the region does not predetermine the result. The analysis shows that the key to efficiency is using such a measures of social support that are aimed at the poorest (targeted benefits), and setting the amount of benefits progressively differentiating the amout of benefit depending on the degree of need.