Theoretical Basis Of State Decentralization[Теоретические Основы Децентрализации В Государстве]

The issue of decentralization in the public administration system in Russia has acquired new urgency in the context of the 2020 crisis. Other countries of the world have faced similar new challenges. The object of the research is the system of separation of powers between regions and the center in a federal state. The purpose of the study is to determine the principles and limitations of authority delegation from higher to lower tiers (i.e. decentralization), potential benefits and prerequisites of delegation. This research provides an extensive review of the literature on decentralization around the world. Based on the analysis of findings and their synthesis, theoretical ideas are formed as to how to distribute powers within the budgetary system, as well as how decentralization and economic growth are connected. Scientific novelty of the paper lies in revealing the prospective areas of research on the problems of authority delegation and economic growth. It is established that decentralization and close interdependence of revenues and expenditures of territorial budgets promotes private sector development. At the same time, the risks of inefficiency of this model are associated with the system of intergovernmental relations aimed at minimizing the negative effects of decentralization. Decentralization and economic growth are linked by the Oates hypothesis, which states that economic growth and decentralization are positively related, since an increase in the degree of decentralization allows better implementation of public policy. The tax decentralization regime has the greatest potential, especially when the quality of public administration is high, and the principles of neutrality and fairness of taxation are maintained. At the same time, empirical assessments of this relationship are ambiguous. Several papers find a negative correlation, others claim the connection is positive or absent. In this regard, the complex nature of the relationship between decentralization and growth under the conditions f the budgetary system of the Russian Federation requires further research.