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Local Governments in the Russian Federation
Part 1

1. General
1.1 Federative state
The Russian Federation consists of 89 member regions called Subjects of the Federation. For purposes of statistical reporting, the regions are grouped into 12 economic zones, and for purposes of political and administrative oversight 7 federal districts have recently been formed, which in all likelihood will eventually replace the former division into 12 economic zones. The extent of economic and demographic disparities across regions is huge, as can be seen from Table 1 (see Appendix).
Subjects of the Russian Federation include 21 republics, 6 krais, 49 oblasts, two federal cities, one autonomous oblast and 10 autonomous districts. In spite of this diversity of categories, pursuant to the 1993 Constitution of the Russian Federation all subjects of the Federation have equal status, even though the Federative Treaty which is an integral part of the Constitution does allow for bilateral agreements between the federal center and member regions providing for special rights and obligations of the regions that are parties to such agreements. In fact, as of October 2000, 51 regions have concluded 47 agreements with the federal government. It is important to stress that whether a region is a republic, a krai, or an oblast, the category name does not by itself say much about the status of the region in question. More than anything else, these differences in names are explained by historic reasons, even though among the regions that concluded bilateral agreements with the center the majority were republics.
Having realized the risks of moving along the way of asymmetric federalism before it was too late, the federal government eventually called off most of the privileges it granted to individual regions earlier. Moreover, in 2000 the State Duma of the RF passed a law mandating that all regions bring their legislation in conformity with the requirements of the federal legislation and the Constitution, which signified a return to the policy of symmetric federalism1, even though in a country as huge and diverse as Russia full symmetry is hardly attainable.
1.2 Ethnic characteristics of the Russian Federation and its regions
Russians form a majority of the population of the Russian Federation. With few exceptions Russians also form the majority of population in most of republics and other ethnic autonomies in Russia (see Tab. 2 in the Appendix).
After Russians, the most numerous ethnic groups are Tatars (3.7% of total population), Ukrainians, and Chuvash (1,17%). No other ethnicity in Russia exceeds 1% of the total population2.
1 As of October 2000, only republics of Bashkortostan and Tatarstan retained individual privileges not stipulated in the 1993 Constitution.
2 Goskomstat, 1994 census.
1.3 Territorial division of the regions
The territories of the subjects of the Federation are divided into rural areas called raions and cities. This division is common to all Russian regions as it has been inherited from the former Soviet Union, even though the borders of jurisdictions themselves in most cases were formed in a much more distant past. Raions, in their turn, are divided into smaller parcels, which can include sub-raion towns, townships or villages, and rural districts. Rural districts cover several small rural settlements. Subraion towns can include townships and rural districts. Therefore, the territorial division of RF subjects generally has three or four levels (see Table 3 in the Appendix).
Prior to the reform, the hierarchy of territories reflected to the hierarchy of administrative subordination. With the transition from the system of administrative subordination to a more decentralized arrangement, settlements of all sizes were granted the right to set up local governments and register as municipalities. All municipalities have equal status and subordination of one municipality to another is not permitted. Therefore, the reform of local government in Russia implied a transition from a three-tier hierarchy of jurisdictions within the regions to a two-tier system including the regional government and local (municipal) governments, with no administrative subordination between the two. Making this transition in practice proved to be difficult. The system of municipalities had to be superimposed over the previous hierarchical structure which in many regions resulted in peculiar organizational forms that combine subordination of municipalities with the coexistence of former raions and tiny villages as single-tier municipalities.
More on the transitional types of local self-government organization that exist in Russia today the reader will find in section “Territorial levels of decentralization”.
Since the breakdown of regional territories into municipalities has not been finalized yet, federal agencies that have their branches in subnational territories are in no hurry to revise their internal organization to bring it in line with the new municipal division.3 In particular, both the Ministry of Taxes and Levies and the State Committee for Statistics (Goskomstat) continue to use the raion breakdown in their reports, where the smallest units of territorial division are raions/cities, so wherever municipal boundaries do not coincide with former raions and cities, data on municipalities is unavailable. Only the total number of localities officially registered as municipalities can be obtained from federal sources, because the federal Registration Chamber collects this information and includes in into its reporting, but any data on the area of jurisdictions, demographic or economic characteristics available from Goskomstat comes only in the old territorial breakdown.
Table 4 in the Appendix summarizes data on the traditional territorial division and municipalities with elected authorities of the Russian federation. Table 5 contains data on urban and rural settlements in the Russian Federation.
1.4 Territories with special status
Two of the Russian regions – federal cities of Moscow and St-Petersburg – enjoy special rights with respect to local self-government. The governments of both cities are entitled to determine the spending responsibilities, property and revenues sources of local governments at their own discretion. The City of Moscow does not have any local governments inside its boundaries. The City of St-Petersburg has more than 100 local governments. However, these enjoy very little autonomy.
There are also about 40 territories in Russia that enjoy a special status - these are the so-called ‘restricted access’ territories (‘zakrytye administrativno-territorialnye obrazovanya’ or ZATOs) that are under the jurisdiction of the federal government (Ministry of Defense and Ministry of Nuclear Energy). ZATOs can be urban or rural settlements. By federal law on ZATOs, their boundaries can cross the boundaries of regions or sub-regional raions. The boundaries of ZATOs, their administrative
3 The only exception is the federal Ministry of Finance which gave up its regional, city and raion offices with the transition to federal type of relations between the center and the regions and institualization of local governments. All local branches of MoF were officially transformed into financial departments of subnational governments of corresponding level.
subordination and the rights and duties of regional governments with respect to ZATOs located in their territories are determined by federal government. ZATOs receive their intergovernmental transfers only from the federal government, which means that financially they are independent from the regional governments. ZATO residents can form local governments. Generally speaking, all regional laws with the exception of laws on fiscal matters, apply across the entire territory of the region, including ZATOs, but in fiscal matters ZATOs are federal territories.
Until recently ZATOs were allowed to retain all taxes collected in their territories, including the regional and federal shares. Starting from the year 2000, all ZATOs except two are mandated to remit federal taxes, as well as levies that accrue to earmarked budgetary and extrabudgetary funds of the federal and/or regional government, to the respective government and or fund in accordance with the federal/regional legislation. Any financing gaps between ZATOs’ expenditure needs and revenues are covered directly from the federal budget. At present discussions are under way in the Russian Government of whether the number of ZATOs should be drastically reduced, and preferential tax treatment that they so far enjoyed cancelled. If those plans come true, most of ZATOs will loose their special status and become ordinary municipalities.
2. Overview of Local Government Reform4
2.1. The Soviet Period
The first step along the path of democratization of local government in Russia was made in the end of 1980s when Russia was still a member of the Soviet Union. In the course of an experiment conducted during the 1987 elections to local Soviets, some raions were allowed to have more candidates than there were seats open for ballot. In all pilot raions taken together (about 5% of the total number of raions), there were 26 thousand candidates competing for 4.7 thousand councilor seats.
In all other respects, local governments remained part of the same highly centralized administrative hierarchy that was completely subordinate to the party apparatus. The pertinent features of local governments in these early years of transition were:
1. lack of any distinction between the local and the state levels of government;
2. the jurisdictions of local governments exactly replicated the boundaries of the existing administrative division of the territory;
3. subordination of local governments to state and party authorities.
The next important landmark was the introduction of amendments to the USSR Constitution and to the Law On Elections of USSR People’s Deputies in 1988. For the evolution of the institute of local self-governance, the most important amendments were those that established the direct right of the voters to nominate candidates, set forth legal guarantees of the right of local Soviets to exercise control over local state agencies and limited the term of the officials appointed by local Soviets.
The first law that used the term «local self-government» was the USSR Law On general principles of local self- government and local enterprise in the USSR (April 9, 1990) that opened the door to cardinal changes in the role of local government in the development of a civic society. Most importantly, this law established:
1. guarantees that local authorities are autonomous, independent and elected by popular vote;
2. the scope of competencies of local Soviets;
3. the transfer of communal property to the disposal of local Soviets;
4 Metrokhin (1999) contains a comprehensive review of local government reform history in Russia. This section draws heavily on this study.
4. revenue sources of local Soviets, including fixed sharing rates of federal taxes and a list of own taxes, levies and duties that local Soviets can introduce at their own discretion.
It should be noted that in that Law the requirement that local authorities be elected by popular vote applied only to representative bodies. The primary territorial level of local self-government established by this law coincided with the bottom level of administrative division that existed at that time in the USSR, which was a rural district, a township, a sub-raion town or a city district.
The first law on local self-government that came into force after the independence, was passed on July 6, 1991 when Russia was still part of the Soviet Union. The main progressive feature of this law was the requirement that not only representative bodies but also heads of local administrations be democratically elected. This law also decreed the dissolution of the so-called executive committees, or bottom level tiers in the hierarchy of state power.
2.2. The Post-Soviet Period
In the early years of independence the evolution of the legal framework of local self-governance in Russia essentially consisted of changing and amending the 1991 Law On local self-government in the RSFSR. The harmonization of this law with other legislative acts and most importantly with the Law On the foundations of the tax system in the RF (Dec. 27 1991) resulted, however, in watering down the gist of the law and limiting the revenue autonomy of local authorities.
The dissolution of the Supreme Council of the RF in the fall of 1993 and the enactment of the new Constitution marked the beginning of a revolutionary phase in the development of local self-government in Russia. The so-called «municipal revolution» originated in the center. It was fueled by the desire to counterbalance the growing political opposition of the regional elite. New departments of federal agencies were specifically commissioned to provide support to the bottom level tier in the hierarchy of Russian statehood. The availability of an ally such as the body of autonomous local self-government authorities and independence of local self-government leaders from the regional administration played into the hands of the team of Russian reformers who had to implement often unpopular policies of the federal government.
The 1993 Constitution was followed by a number of other laws initiated by the federal center that established the procedures of forming local governments and set the rules for their operation. All these laws were aimed at strengthening the autonomy of the bottom-level tier of public administration. Having determined the relations between the central and the regional levels of government as those of a federal state, the central government had at the same time curtailed the rights of the regions with respect to local governments by replicating the federative relations between the center and the regions at the subnational level, though in a somewhat weaker form.
The majority of regions had benefited from the federalization of their relations with the center, but they were reluctant to give up any of their powers with respect to subregional territories. In contrast to decentralization of power at the federal level, they preferred a paternalistic model of relations with the local governments, and instead of making efficient use of the new levers of control – the legislative initiative and law enforcement, they opted for the «re-institution of the vertical axis of executive power».
One of the first actions undertaken by President Vladimir Putin following his inauguration on December 31, 1999, was to dismiss one of the key advocates of local self-governance in the federal administration from his position as head of the Department of Local Governments in Office of the President. The Department itself was liquidated soon after.
The preferences of the governors for centralization were echoed in the policy of strengthening the entire vertical of power from top to bottom conducted by President Putin from the very start of his term in the office. The Office of the President became the source of legislative initiatives and administrative decisions that led to reinforcement of administrative methods of control in the Russian State at all levels of power.
3. Constitutional and other legal guarantees of local self-government
3.1. The Constitutional Foundations of Local Self-Governance
In the 1993 Constitution lists the institute of local self-government among the foundations of the constitutional order of the Russian Federation, along with the institute of the state power, federative organization of the state, republican form of rule and other provisions of Chapter I of the Main Law of Russia.
In Chapter I of the Constitution, bodies of local self-government are listed among the institutions through which the people exercise their rule (alongside with direct democracy and democracy exercised via bodies of state power). This Chapter also provides for municipal ownership of land.
Article 12 unequivocally determines that «bodies of local self-government do not form part of the system of state power». The Constitution has replaced the administrative subordination of local authorities to the regional ones with a legal regulation framework.
Chapter 8 of the Constitution is entirely devoted to local self-governance. The four articles of this Chapter provide the following guarantees:
• independence of local communities in addressing issues of local importance;
• diversity of local self-government organization models;
• when determining the boundaries of local self-government jurisdictions, regional authorities must take into account the preferences of local communities;
• financial autonomy (albeit limited) of local governments is achieved via discretional management of municipal property and implementation of budgetary rights with respect to local revenues and expenditures;
• provision of adequate funding for performing state functions, if such functions were delegated to the local government by the decision of state (federal or regional) authorities;
• reimbursement of local governments for the costs of implementing federal mandates.
The Constitution establishes that establishment of general principles of local government organization is a joint responsibility of the federal center and the regions.
To fulfill their part of this joint responsibility, federal authorities have passed a number of laws that set the rules for local government organization. These include:
On general principles of local self-government organization in the Russian Federation, Aug. 28, 1995;
On ensuring the constitutional rights of the citizens of the Russian Federation to elect and be elected to bodies of local self-government, Nov. 26, 1996;
On basic guarantees of electoral rights of the citizens of the Russian Federation, Sept.19, 1997;
On financial foundations of local self-government in the Russian Federation, Sept. 25, 1997;
A more detailed list of legal acts on local self-government in the Russian Federation is presented in Table 6 in the Appendix.
3.2. General principles of local self-government organization
The law that lays down the fundamental principles of local self-government in Russia is the federal Law On general principles of local self-government organization in the RF.
The most important distinction between this law and its predecessors from the soviet period lies in the fact that this law establishes the general principles of local self-government, rather than the system of local self-government bodies.
The law defines the domain of local self-government, or the municipality, as any populated territory (city, town, township, a collection of these on a single territory, or any part thereof) to which the following four conditions apply:
- it is self-governed;
- it has municipal property;
- it has a budget;
- it has elected bodies of local self-government.
In conformity with the Constitution, the law allows for the diversity of levels of territorial division at which local self-government can be instituted. It permits to set up local self-government both at the raion level, and at the level of any towns or villages irrespective of the size of their population.
This law has also established the main distinctive feature of the Russian model of local self-government that consists in granting a uniform legal status to all local self-government entities. This means that all local governments – be they raions, towns, townships of rural districts – enjoy the same institutional and administrative rights. The law does not allow subordination of one municipality to another.
Therefore, pursuant to the Law On general principles of local self-government organization, the entire territory of the Russian Federation should be divided into non-overlapping jurisdictions (territories) of municipalities or local self-government entities.
The proclaimed equality of municipalities distinguishes the Russian model of local self-government both from the soviet model and from the models implemented in the majority of FSU countries that chose to build the institute of local self-government upon the foundations that were laid in the pre-reform period.
The law details the scope of authority of the regions with respect to local self-governance, and lists the responsibilities of local governments. Most local responsibilities are stated in terms of obligations of local governments to maintain social infrastructure facilities that were transferred into municipal property in the course of segregation of property between the region and the localities, rather than in terms of functions or public services that should be provided locally. Unlike many countries with strong institute of local government, local governments in Russia are made responsible for the delivery of such public services as education and healthcare. However, the law allows local governments to limit service delivery to the capacity of the social infrastructure facilities that were transferred to the property of municipality. Therefore, the assignment of expenditure responsibilities between the regional and local governments depends on the delineation of property between these two government levels
See also the section on public services and municipal property.
3.3. Federal Guarantees of Forming of Local Self-government Elective Bodies
One of the major objectives of the federal policy vis-à-vis the development of local self-government was to induce regions to form a system of local self-government by adopting requisite regional laws and holding municipal elections.
In late 1996, pursuant to the Law On General Principles, the federal Law On Ensuring the Constitutional Rights of the Citizens of the Russian Federation to Elect and be Elected to Bodies of Local Self-government had been passed to prevent a surge of regional resistance to the establishment of local self-government.
In fact, the law on local elections was a form of federal intervention in affairs of the regions that failed to comply with the federal legislation. Where regional administrations did nothing to organize elections to bodies of local self-government, the right to convene such elections was assigned to courts. The rules to be followed in holding elections were set in a special attachment to the Law.
A year later, in the fall of 1997 the federal Law On Basic Guarantees of Electoral Rights and Right of the Citizens of the Russian Federation to Participate in Referendums was passed to guarantee electoral rights of citizens to hold elections to bodies of local self-government even if there were no regional laws to this effect. The guarantees made it possible to hold elections on the basis of the above federal law.
3.4. Financial Foundations of Local Self-government
Another important objective of federal authorities with regard to development of local self-governance was to ensure financial autonomy of local budgets.
Sources of tax revenues of local budgets were determined in 1991 in the federal Law On Foundations of the Tax System of the Russian Federation. However, local taxes and fees enumerated therein as well as insignificant federal taxes assigned to localities on a permanent basis in most cases did not cover more than 20 percent of local expenditure needs. The resulting financing gap had to be covered with intergovernmental transfers from the regional government.
Vesting regional administrations with the authority to regulate local revenues made local governments heavily dependent on regional authorities. The Law On Financial Foundations of Local Self-government in the Russian Federation (hereinafter referred to as the Law On Financial Foundations) sought to ensure stable revenues for local budgets by restricting the latitude of regional administrations in disposing of the revenue sources assigned to them. The Law was passed in September 1997 after the President had overcome the veto of the Upper Chamber of the Russian Parliament composed of governors and heads of representative bodies of Russian regions.
The Law On Financial Foundations has become an important milestone on the way to the establishment of a full-fledged institution of local finances. This Law:
- establishes the foundations of the budget process in municipalities;
- establishes the maximum permissible levels of municipal debt;
- limits the involvement of local authorities in financial risks, from speculation in stock markets to contributing local budget funds to authorized capitals of banks;
- establishes the right of municipalities to set up their own treasuries and tax administrations;
- establishes sharing rates of some federal taxes for local budgets that shall be complied with «on the average» across all municipalities in the region;
- requires that intergovernmental transfers extended from the regional to municipal budgets be computed in a formalized fashion and that a uniform methodology be applied to all municipalities in calculation of variable sharing rates and allocation of equalization grants;
- prohibits reduction of transfers to municipalities whose actual tax collections from own sources exceed the planned amounts.
With the huge revenue disparities that exist across the regions in Russia and across municipalities within each region, the Law On Financial Foundations has unfortunately failed to ensure financial autonomy for most of the municipal entities.
In drafting the law federal advocates of local self-government were seeking first and foremost to ensure financial sovereignty of their main protégés – large cities, the mayors of which have a significant political clout. The draft law that they proposed required that every local budget be assigned the same fixed rate of shared federal taxes. But since the tax base is distributed unevenly across municipalities, assignment of the same retention rates to all municipalities would have perpetuated the existing inequality, and any fiscal equalization would have had to be conducted by the regional governments from their own sources and at their own discretion. Eventually the vote was in favor of the version of the law that fixed sharing rates to be complied with «on the average» for all municipalities rather than for every individual municipality. The Law allows, inter alia, to set zero rates of federal taxes for «rich» municipalities and let poor localities retain one hundred percent of the regional share of federal taxes. Hence, budget revenues are equalized among municipalities through re-directing financial revenues from rich to poor municipalities, while transfers from the regional budget are used for narrowing the remaining disparity.
Furthermore, the Law sets no requirements with regard to distribution of federal grants extended to the regions for equalization purposes from the regional budget to localities, although in subsidized regions those resources may by far exceed total tax revenues raised in their jurisdictions.
For more details see a later section on local finances.
3.5. Latest Amendments to the Law on General Principles
The passing of the federal Law On Foundations of Municipal Service in the Russian Federation (see section on municipal employees) completed the establishment of the legislative framework of what President Yeltsin"s administration perceived to be local self-government. However, right after President Putin came to power, in the summer of 2000 the fundamental Law On General Principles was significantly amended. The core of the amendments was a reversion to the administrative methods of management of the public sector from top to bottom.
The Law On General Principles as amended (Article 49) establishes that should the court find decisions of bodies of local self-government incompatible with the Constitution, or federal or regional legislation, and should the representative body or head of local self-government fail to call off the contradictory legislative act or provisions thereof, head of the subject of the Federation or the Russian President shall be entitled to dissolve the representative body of local self-government and discharge the head of municipality from office, convene new elections and appoint an acting head of municipality of his own choice for the interim period.
Prior to the introduction of the above amendments the Law did provide for dissolution of the representative body of local self-government and dismissal of the head of local self-government, but the previous procedure was more complicated and necessitated additional court proceedings. Unfortunately, the new authorities have opted for strengthening of administrative levers instead of trying to improve enforcement of court rulings.
3.6. Regional Legislation in the Field of Local Self-government
The principle of joint jurisdiction of the Federation and its subjects over issues of organization of local self-government embodied in the Constitution implies that Subjects of the Federation will pass regional laws to specify the relationships with localities in accordance with the existing federal legislation in this field. The Law On General Principles sets out a list of issues that regional laws on local self-government should regulate. It includes:
1. defining of the procedure for establishment of territories of municipal entities;
2. establishment of the procedure for holding municipal elections;
3. establishment of the procedure for registration of municipal charters;
4. establishment of the procedure for transfer of property to municipalities;
5. regulation of fiscal relations between the region and localities, equalization of fiscal capacity of municipalities;
6. vesting bodies of local self-government with, and transfer of appropriate financial resources to support the execution of, certain State powers;
7. passing of regional laws on municipal service and other issues.
The regions have been developing regional legislation on local self-government since 1996. They have been passing laws on both general and particular issues of local self-government falling within regional competence. The process is far from being completed. Different regions have shown different degree of willingness to give up administrative methods of government.
Subject to their attitude to the reform of local self-government, Russian regions can theoretically be broken down into three groups5.
Constructive Approach Group: It includes regions for which the implementation of the constitutional concept of local self-government is a requirement subject to unconditional compliance. Furthermore, they realize the advantages associated with the development of independent public administration at the local level. In most of those regions municipal elections had been held even before the Federal Law on General Principles was passed. Their legislators have been very active in developing laws on municipal issues, going in most cases ahead of the federal legislation.
This group of regions includes Leningrad, Tyumen, Vologda, Astrakhan, Irkutsk, Voronezh, Nizhni Novgorod, Saratov, Pskov and Kaluga oblasts and Khanti-Mansi Autonomous Okrug.
Resistance Group: It includes regions where self-government is either non-existent or forced out to the level of small townships, deprived of any legal basis. Issues of local importance assigned by the federal legislation to the competence of local self-government are dealt with by territorial branches of State power of Russian regions in cities and raions appointed by the central regional authorities. In some cases heads of the executive authorities of cities and raions may be elected but anyhow are subject to removal from office by the regional government that is also the primary authority in annulment of their decisions. Legislation on municipal issues there is either still in its infancy or ridden with all sorts of conflicts with the federal legislation. In some of those regions bodies of local self-government are not only non-existent but even have not been provided for in the regional legislation.
Until recently this group of regions included Republic of Bashkortostan, Republic of Tatarstan, Udmurt Republic, Republic of Komi, Ingush Republic, Karachai-Circassian Republic, Republic of Kalmykia, Republic of Sakha, Republic of Khakassia, Republic of Tyva, Kursk Oblast, Novosibirsk Oblast and Jewish Autonomous Oblast.
As can be seen from the list, most of the regions in the latter group are ethnic autonomies. Their leaders avoid making any public avowals of refusal to comply with constitutional rules. Instead, they would expand on the need to ensure controllability of territories, or argue that the population is not prepared for a new organization of government or that localities are in lack of managerial personnel.
Wait-and-see Group: It is a group of regions that look upon local self-government as inescapable evil. They refrain from committing any blunt violations of the federal legislation on local self-government, but at the same time resort to all sorts of ploys to delay the process. It was not until 1997 that bodies of local self-government have been formed in their jurisdictions, the legislation still being in the inception phase with most of its pieces borrowed from other regions, rather than being a product of local effort.
It is a fairly large group of regions tending to break away and join one of the other two groups.
Because of this difference in attitudes of regional authorities to the issue of establishment of municipal governments the quality of regional laws on local self-government in many subjects of the Federation leaves much to be desired or they contain norms running counter to the Constitution and federal legislation.
5 This classification was proposed in Zamotayev (1999).
3.7. Violations of Constitutional Principles and Federal Legislation Norms in Regional Laws
The history of development of local self-government in Russia is that of frequent and grave conflicts between regions and municipalities. The primary reasons for occurrence of conflicts between regional authorities and local governments are:
- unwillingness of regional leaders to share their power and everything that secures it: property, taxes and other financial resources, rights to decision-making in business and economic areas;
- lack of regional administrative experience and government skills required under the conditions of decentralized authority;
- contradictions arising within local self-government between interests of rich and poor municipalities;
- traditions of subordination of lower level to higher level governments.
To resolve those contradictions to their advantage regions resort to both legal and illegal methods. The most typical violations contained in acts of subjects of the Federation in the field of local self-government are as follows:
1. Restrictions of electoral rights of citizens with respect to local self-government through introduction of residence qualification, age qualification and property qualification in contradiction to the federal legislation, as well as through the ability of regional authorities to discharge heads of local self-government.
2. Restrictions on independence of local self-government vis-à-vis matters outside regional competence. The sorts of restrictions that can be encountered here are:
- establishment of an exhaustive list of municipalities that may be set up in the region;
- regulation of the structure and operation of bodies of local self-government;
- restrictions on disposal of municipal property;
- limiting local choices with regard to formulation and execution of local budgets.
3. Assigning powers of local self-government to bodies of State power of administrative-territorial units of Russian regions.
4. Assignment of bodies of local self-government with some of the State powers not supported by requisite financial resources.
5. Taking some of the territories out of the scope of legislation on local self-government (establishment of the so-called «regional districts»)6.
6. Changing of boundaries of the territories within which local self-government is implemented, without regard for public opinion.
7. Making one municipal entity subordinate to another, primarily in financial matters.
Violations set out above are in one form or another encountered in the legislation of the vast majority of regions.
It should be noted in all fairness that numerous violations of the federal legislation occurring in the course of development of regulatory and legislative framework of local self-government are to a certain extent attributable to objective causes such as novelty of local self government problems for Russia, centralist mentality of political leaders fostered during many decades of the Soviet system, and lack of skilled experts in public law and public finance.
6 For instance, in Saratov Oblast.
Inconsistencies within the federal legislation itself are another important contributory factor for violations of the federal legislation by regional legislative acts. It is not infrequent when provisions of one federal law on issues of local self-government are inconsistent with other laws. Furthermore, in one and the same law (for instance, the basic law on General Principles) one article may run counter to another.
3.8. Protection of Constitutional Rights of Local Self-government
In the Yeltsin era of the history of new Russian State there were a number of cases when rights of local self-government had to be defended at the highest possible level: by the Russian Supreme Court and Constitutional Court. Undoubtedly, it happened only when claims of local authorities were recognized at the very top and made use of as a precedent for preventing the recurrence of similar situations in the future, whereas in the vast majority of cases small municipalities find it extremely difficult to uphold their rights before omnipotent regional bosses that even federal agencies operating in regions often find themselves dependent on.
In what follows we will give a few examples of resolution of conflicts between local and regional authorities at the federal level. One case in point is the dismissal in July 1994 by the governor of Yaroslavl Oblast of a few heads of cities and raions superseded by other appointees. The governor"s actions were appealed against in court at the initiative of the regional branch of Democratic Russia, a political movement of liberal creed. The Yaroslavl regional court found the complaint valid and satisfied the claim for unlawfulness of governor"s actions. The regional authorities lodged protest with the Russian Supreme Court against the ruling of the regional court, but the Supreme Court left the ruling of the regional court unchanged.
The Udmurt law passed in April 1996 provided for replacement of local self-government by the executive branch of State power, including the establishment of bodies of State power at the level of cities, raions and below-raion level to be appointed by a higher level. In view of the unconstitutional nature of the organization of subnational bodies of government prescribed by it, the law ended up in the Constitutional Court. The compliance of the said republican law with the Constitution was questioned by President Yeltsin and a group of State Duma deputies.
In January 1997 proceedings in the case resulted in the decision of the Constitutional Court containing two provisions of fundamental importance for the development of local self-government:
1. Bodies of State power of administrative-territorial units (local bodies of State power) cannot be assigned with powers of local self-government;
2. Bodies of State power of administrative-territorial units (local bodies of State power) shall be set up on the basis of the same general principles by which State power in the Russian Federation is organized, i.e. they shall be elected by the citizenry of a particular jurisdiction.
On the 15th of January, 1998, having considered other infringements by subjects of the Federation on principles of establishment of the executive authority at the local level, the Constitutional Court ruled that bodies of public power should be of either State or municipal nature. The nature of a body of public power is determined by the scope of issues falling under its competence. Thus, the Constitutional Court has once again confirmed that whatever name may be given to bodies of government that form local budget, introduce local taxes and establish the procedure for management of municipal property, they shall be recognized as bodies of local self-government and as such be separated from bodies of State power and formed through elections by the population living within the boundaries of a respective territory.
4. Territorial levels of decentralization
Before the reform of local government was launched, Russia had a very rigid administrative hierarchy in which administrations of smaller territories were subordinate to administrations of larger territories within the boundaries of which the former were located. Depending on their geographic size, population size and density, and place within the administrative and territorial hierarchy, administrative-territorial units making up regions would form the following hierarchy: region – raions and cities subordinate to regions– cities subordinate to raions; townships, and rural districts (for more details, see earlier section on territorial division of the regions). Municipalities that have come into existence in recent years were formed in different regions at different tiers of the former administrative and territorial hierarchy: in some regions they were set up at the level of former cities and raions; in others they were established at the level of rural districts; still another alternative structure is when municipalities are partially made up at the level of cities and raions and partially at the level of rural districts. In some regions former raions were transformed into territorial branches of the regional administration, making up a second tier of the State power of a subject of the Federation (region – raions and cities), while in other regions what used to be raions was transformed into municipalities, not infrequently having a two-tier structure (cities, raions – townships, rural districts). One can distinguish the following basic types of local public administration currently in operation in different regions of Russia (Table 7 in the Appendix):
Type I One-tier structure of State power of a subject of the Federation and one-tier structure of municipal bodies of government (at the level of large cities and raions)
Local bodies of self-government are for the most part formed on the basis of large cities and raions in the traditional administrative-territorial division. Municipalities enjoy the fiscal rights determined by the federal legislation. Their fiscal relations with regional bodies of State power (amounts of transfers and tax sharing) are designed by regional authorities. In a number of regions the single-tier regional administration co-exists with municipalities formed on the basis of subraion cities and rural districts. To the extent that the raion tier is missing, regional authorities have to deal with hundreds of sub-raion municipalities formed on the basis of small villages.
Type II Two-tier structure of State power of a subject of the Federation and one-tier structure of local government where local governments are deprived of some important rights guaranteed by the federal legislation
This structure is similar to the previous one except that municipalities formed at below-raion level are deprived of some rights and powers, budgetary ones in particular, established for them by the federal legislation. The authority to set local taxes is vested in territorial branches of the regional administration that have no elected bodies. Budgets of municipalities are incorporated in the regional budget in the form of expenditure plans.
Type III One-tier structure of State power of a subject of the Federation and two-tier model of local self-government where some local governments are subordinate to other local governments in violation of the federal legislation
The first level of local government includes big cities and raions; the second level includes sub-raion cities and other populated areas within cities or raions. Local residents elect both the first-level and the second-level governments. Local governments of the first level engage in direct financial relations with the regional authorities. Financial relations between localities of the second level and regional authorities are indirect and go through local governments of the first level. Local governments of the first level are responsible, inter alia, for the distribution of regional grants to localities of the second level and for splitting the sharing rates of regional/federal shared taxes assigned by the regional administration to the local level. First-tier local governments are in fact performing the functions of bodies of State power of a region.
If the second-tier municipalities cover the entire territory in the jurisdiction of the first-tier municipality, the latter is usually made responsible for maintenance of social infrastructure facilities providing services to the entire population of the area. Local taxes in such cases are usually established by the second-tier municipalities, but sometimes these smaller municipalities delegate their taxing authority to the raion-level municipality, in which case the raion usually sets the uniform tax rates for all municipalities located within its boundaries. If second-tier municipalities represent individual inclusions in the territory of the first-tier locality, the latter is responsible for the performance of functions of local self-government in the territory outside the jurisdiction of second-tier municipalities. Local taxes in this case are established by local self-governments of both levels. This alternative was dubbed “matrioshka-doll” structure.
The above forms of local self-government organization can make up different combinations in different subjects: e.g. of 295 municipalities of Tyumen Oblast, 4 have been formed at the level of large cities, 2 – at the level of raions with the rest set up at the level of small townships below raions. In Vladimir Oblast, 18 municipalities set up at raion level have a «matrioshka-doll» structure with the other 7 municipal entities having a one-tier type of organization. The second-tier municipalities in the Vladimir Oblast are individual populated areas that have opted for local autonomy. However, regional authorities are unwilling to recognize them as full-fledged participants in intergovernmental fiscal relations7 and deal with them through the first-tier bodies of local self-government.
At present, there are about 29,500 local administrations in Russia, of which 12,2618 are officially registered as municipal entities with only 11,691 having elected representative authorities9, only 11,209 municipalities are endowed with municipal property and only 4,500 have fully independent10 budgets.
5. Local Politics, Decision Making
5.1 Local politics
With the exception of central regional cities where local politics are closely interwoven with the regional ones, the political process at the local level is virtually non-existent and for most part limited to holding local elections and referenda on forming or merging municipalities. Local units of regional and federal parties are also virtually non existent and the same is true for local units of non-government organizations (unions of veterans, single mothers, families with many children, the disabled, etc. are all operating almost exclusively in regional capitals and are not represented at the municipal level). All on-going policy issues are delt with by the mayor (head of local administration) and the local council, and the main debates and controversies the outcomes of which shape local policies occur between the local administration and the regional authorities, rather than between political parties or local interest groups and the local administration. The explanation for this state of affairs is quite obvious: financially, local governments in Russia are strongly dependent on governments of higher levels, therefore for them it is much more important to please the regional bosses than their voters. The lack of financial autonomy of local governments means, inter alia, that if a local government fails to fulfill the promises it made to the local constituency during the elections, it can always put the blame at the door of the regional administration that failed to provide adequate funding. The strength or weakness of local policy makers is determined almost exclusively by their ability to negotiate with the region.
Moreover, since regional grants are traditionally allocated to localities for the purposes of maintaining the existing social infrastructure facilities, such as schools or kindergartens, that were not built by municipalities, but inherited from the old system, even when in dire financial circumstances local bosses refuse to close down vacant or underused schools or kindergartens, because any cuts in the number of social facilities that local governments have on their balance sheet deprives them of a very strong argument in favor of increased regional grants in negotiations with the regional authorities. The rules of the game are such that preservation of the existing objects of social infrastructure at any cost becomes a single most important policy objective of local governments, (irrespective of whether the services that require the use of these facilities are actually needed by local
7 In other words, they don’t set shares of regulating taxes for them nor do they directly distribute transfers to them.
8 «For ming Local Self-Governance in the Russian Federation», Goskomstat, September 2000
9 For instance, in the Ingush Republic heads of municipalities have been appointed by decrees of the Republican President.
10 According to Goskomstat data, 11,809 municipalities have local budgets. However, the majority of them have no power to introduce local taxes in their jurisdictions.
constituency) and this topic becomes central at the times of election campaigns. In the period between the elections local officials are accountable not so much to the voters, but to the regional authorities.
Apart from financial dependence of local governments on higher levels of authority, the reason for weak interest in local politics on the part of voters lies in the lack of traditions of participating in political life and forming interest groups at citizens’ own initiative, rather than on instructions from above, as was the usual custom in the days of the party rule.
One of the problems stemming from the lack of firm political position on the part of the voters is that it is almost impossible to dismiss mayors that did not live up to the expectations of the voters. This becomes a serious problem in the regions where local governments are formed in small villages, where the lack of expertise in public administration is most strongly felt, for instance, in the Tuyment and Astrakhan oblasts. In the Astrakhan Oblast, the level of unemployment in many small villages is nearly 100%, local tax collections are nil, so in order to ensure the right of all settlements to create local governments, the oblast pays the salaries of local officials from the oblast budget. For unemployed villagers this creates a very strong incentive to institute local government, as for them the availability of local government means first and foremost the availability of jobs in the local administration. Afterwards, villagers often become dissatisfied with their mayors, but find it easier to express their dissatisfaction by writing complaints to the regional authority than by holding re-elections. Besides, until recently regional authorities were not entitled to dismiss mayors elected by popular vote. Cases of early dismissals of mayors by voters themselves are few, which is another indication of the fact that the evolution of civic society and of the institute of local self-governance in Russia is still in its early stages.
5.2 Local elections
Legislative foundations of local election process are established by the federal laws On Basic Guarantees of Electoral Rights and Right of the Citizens of the Russian Federation to Participate in Referenda (1997) and On Ensuring Constitutional Rights of Citizens of the Russian Federation to Elect and be Elected to Bodies of Local Self-government (1996).
Starting from 1994, local elections in different regions were held at different times. The dates of the first elections would usually be set by regional governments, with the dates of subsequent elections set in accordance with the municipal charters.
For local councils the office terms differ by region and municipality, and are usually set by regional legislation. In most regions, the term of powers of all local councils is 4 years, but in some regions it can be 4 years for most municipalities and 2 years for some municipalities (Republic of Mordovia, Primorski Krai, Vladimir, Irkutsk, Kamchatka, Pskov and Tver Oblasts, and Koryak Autonomous Okrug). In some localities of the Republic of Tatarstan, Stavropol Krai and Tver Oblast the term of local councils is 5 years11.
Elections of deputies to local councils, or representative bodies of local self-government, in most territories were held under the majority electoral system with one-mandate electoral districts. In 28 regions multi-mandate electoral districts were set up, while Krasnoyarsk Krai and Sverdlovsk Oblast used a mixture of the two systems where some of the deputies were elected in accordance with a proportionality system based on election of deputies from slates of electoral associations.
Associations of political parties do not play a big role at the local level. Most of candidates belong to no party whatsoever or are party members, but run for their seats as independent candidates. As was mentioned earlier, the presence of political parties and NGOs can only be felt at local elections in regional capital cities, the most active being local branches of the Communist Party (CPRF) and Liberal-Democratic Party of Russia (LDPR)12. There are no legal limitations for participation of political parties in local elections, however, parties are more active in regional
11 Ovchinnikov (1999).
12 Luhterhandt-Mikhalyova (1999)
elections than in local ones. Nevertheless, in some regions, including Voronezh, Rostov, and Saratov oblasts, political parties make a strong presence at the local level. In Saratov Oblast, for instance, the political scene at all levels is dominated by the administrative party of Governor Ayatskov, which in fact has absorbed the regional branches of such nation-wide parties as Our Home is Russia, Russian National Congress, The Democratic Choice of Russia. The only other party that won any seats in 1996 local elections in Saratov Oblast was the CPRF (three seats in Saratov City Duma in December 1996 elections). In Rostov Oblast, out of 55 municipalities one is headed by member of LDPR, tree mayors are members of CPRF. The mayor of Rostov City was supported by Yabloko during the elections, though he himself is not a member of Yabloko.
The main criteria for voters in electing members of local councils and heads of administration are such personal characteristics of candidates as their occupation or availability of past experience of work in administrative positions. Among candidates running for a seat in the representative branch of government there are many teachers, medical doctors and directors of enterprises.
5.3 Participation of Citizenry in Decision-making
Article IV of the Law On General Principles describes forms in which citizens can directly express their will. These include referenda and gatherings of the citizens. The procedure for convocation and holding of a local referendum or a local gathering is established by the municipal charter in accordance with laws of subjects of the Russian Federation.
According to Article 22(5) "a decision made at the local referendum does not require approval by any bodies of State power, or State officials or bodies of local self-government. If for such a decision to be implemented a regulatory act is required to be issued, a body of local self-government that has competence over the issue in question shall pass such an act ".
Issues relating to holding of referenda are also addressed in the Law On Basic Guarantees of Electoral Rights and Right of the Citizens of the Russian Federation to Participate in Referenda.
In addition, Article 25 of the Law On General Principles grants citizens the right to law-making initiative on issues of local importance. "Bills on issues of local importance submitted by the citizenry to bodies of local self-government are subject to mandatory consideration at open sessions attended by representatives of the public, and the results of such consideration shall be made public."
But despite their statutory right to participate in decision-making, citizens very rarely display legislative zeal. Besides, law-making attempts often run into administrative difficulties. For instance, alternative municipal charters were drafted in at least 11 out of 41 municipalities in Saratov Oblast, but none of these drafts came for an open discussion or was put to the vote.
5.4 Ethnic Aspects of Local Self-government
At present, there are two federal laws that regulate the rights of ethnicities in the Russian Federation: (1) On Ethnic and Cultural Autonomy and (2) On Guarantees of Rights of Indigenous Minorities in the Russian Federation. Both Laws are of a rather general declaratory nature, therefore some subjects of the Federation13 adopt their own legislative acts on ethnic issues.
In Russia there are 2 forms of ethnic self-governance: exterritorial (ethnic cultural associations) and territorial (local ethnic autonomies)14.
Ethnic cultural associations (ECA) are public associations of citizens regarding themselves as part of a certain ethnic community, formed on the basis of self-organization and self-government. Some of the subjects of the Federation (Republic of Bashkortostan, Republic of Tatarstan and Republic of Komi) have passed their own laws on ECAs. The major focus of ECA activities is ethnic
13 E.g.: Karelia Republic, Buryat Republic, Sakha (Yakut) Republic, and Primorski Krai.
14 Grushin (1999).
and cultural issues and education (teaching of a national language, organization of centers of national culture and handicraft, publishing newspapers in national languages).
Local ethnic autonomies are organized in places where scanty indigenous peoples (mostly peoples of the North, Siberia and Far East) live in compact communities. Local ethnic autonomies are usually instituted at the level of small villages or sub-raion rural districts that do not have the status of municipalities, in which case these autonomies are called ‘units of territorial public self-government’ rather than units of local self-government. However, ethnic municipalities also exist in many regions, like the ethnic Evenk Raion in the Republic of Buryat, Kalevala Raion and Vepsskaya Volost in the Republic of Karelia, ethnic uluses in the Republic of Yakutia, etc.. The status of an ethnic self-government is conferred to a village or a raion by the regional law.
Ethnic territorial autonomies may be granted certain privileges by regional laws, for example, a lower tax burden, admittance to regional universities and colleges without competitive exams. Primorski Krai government created reservations (called ‘life-support territories’) for scanty ethnic groups.
Recent years have seen the rebirth of Cossack traditions. Cossack communities operate both as ethnic cultural associations and in the form of territorial self-government. For example, in Rostov Oblast Cossack groups act within the framework of a territorial public self-government units. In other regions the Cossack movement has taken the form of an ex-territorial associations called the ‘Cossack Battalions’.
The case of Chelyabinsk Oblast illustrates the lengths that regional administrations are willing to go to keep the ethnic movements that are gaining political weight under control. In the summer of 2000, Chelyabinsk Oblast Administration attempted to dismiss the head of the regional Cossack Battalion, ataman Loshankov, and appoint its own candidate. For this, the oblast administration convened a conference of atamans of local Cossack units, even though the right to convene such conferences, pursuant to the Charter of Cossack Associations, belongs exclusively to battalion atamans. Not surprisingly, the atamans who attended the conference were loyal to the oblast administration, and voted to dismiss Loshankov. Ataman Loshankov did not acknowledge his dismissal as legal and appealed against the oblast decision to court, but the federal law on the Cossack movement has been tabled in the State Duma for five years already, and without that law the courts are unable to deliver any rulings that would be regarded as conclusive by the litigating parties. In the mean time, the oblast administration has made another move to win full control over the Cossack movement in the region. It has decreed that all local Cossack atamans will have to pass an attestation procedure or will be dismissed, and that the attestation committee shall be appointed by the oblast government. The outcome of that move was not yet known at the time of the writing, but the political fight between Loshakov and supporters and the oblast administration was in full swing.
5.5 Associations of Municipal Entities
Pursuant to Article 10 of the Law On General Principles, "for coordinating activities and more efficient exercise of their rights and interests, municipal entities shall have the right to set up societies in the form of associations or unions that shall be subject to registration in accordance with the procedure established for non-profit organizations. Associations and unions of municipal entities cannot be assigned powers of bodies of local self-government."
Until 1998 there were three all-Russian organizations operating in Russia: the Union of Russian Cities, the Union of Small Russian Cities and the Russian Union of Local Authorities. Besides there were various associations set up on a territorial basis, a few cases in point being "Ural Cities" and associations set up within regional boundaries (Association of Municipalities of the Orenburg Oblast).
In 1998 a Congress of Municipalities of the Russian Federation was established to become the largest and most influential association of local governments in Russia today. The Congress was founded by 39 unions and associations. The Congress participates in formulating draft federal budgets, federal laws, federal programs, and other regulatory and legislative instruments on issues of local self-government. Besides, the Congress takes part in sessions of the European Union Chamber of Local governments.