Vladimir Yermakov

Basing on the knowledge of the developing system of the inter-budgetary transfers from 1995 to 2013 and the academic prerequisites of their efficiency, we have collected and analyzed the statistical data; substantiated choosing the criteria for evaluating the inequality of regions; selected a great number of necessary analytic indicators, characteristic of regional inequality; suggested an econometric model; conducted testing of two research hypotheses: (1) grants-in-aid inter alia lead to equalizing regional fiscal capacities; (2) inter-budgetary transfers lead to reducing the trans-regional inequality according to socio-economic indicators. The author's analysis shows that there is no scientific support to both hypotheses: inter-budgetary transfers do not statistically influence trans-regional inequality according to socio-economic indicators, and they do not lead to reducing significantly the inequality according to the actual fiscal capacity level. We propose that it might be caused not by inefficient expenditure, but by the missing correlation between the inter-budgetary transfer size and the regional socio-economic development level. The work results call for new scientific research with a view to substantiating a reconsideration of the budgetary policy and optimizing the financial mechanism.