Activities of local authorities in the years of NEP:
peculiarities of organizational and legal regulation

Krivoruchko Vladislav Kirillovich Postgraduate student; Department of Historical Informatics; Lomonosov Moscow State University 1 Leninskie Gory str., room 857, Moscow, 119991, Russia vladislav.krivoruchko1999@mail.ru

Introduction

In the pre–revolutionary period, local government was represented by provincial institutions, and local self-government was represented by zemstvo assemblies and city dumas, to which the relevant administrations were subordinate. They were responsible for the issues of local economic and social construction. The revolution and the civil war led to the liquidation of the old system of government in 1917 and the abolition of local budgets in 1920. By the early 1920s, only the structure and general competencies of local authorities had been defined: provincial, county, volost, and city. As a result, the central administrative apparatus, and with it the state budget, were overloaded, which led to an increase in crisis phenomena in the conditions of post-war devastation and hyperinflation.

In 1921, a transition was made to a new economic policy, which was supposed to lead the country out of the crisis. The NEP gave an impetus to the development and consolidation of new principles, methods and mechanisms of public administration in the field, and also initiated the formation of a multi-level budget system.

The issues of the organization and functioning of local authorities during the NEP period have been in the focus of Russian historiography since the 1920s. The works of S. A. Kotlyarevsky ^[1], L. A. Velikhov ^[2], V. N. Tverdokhlebov ^[3] and T. P. Korzhikhina ^[4] became the most in demand in Soviet historical science, in the post–Soviet period - I. V. Arkhipkin ^[5] T. F. Yaschuk ^{[6, 7]}, A. E. Boyko ^[8], I. B. Danilova ^{[9, 10]} and others. The authors agree in their assessment of the 1920s as a period of decentralization of the Soviet system of government and the search for effective forms of local government organization.

The prospects for further study of Soviet state-building in the 1920s and 1930s are associated with the testing of three interrelated research areas: ^[11], one of which is the preparation of comprehensive works based on the concepts of historical institutionalism (D. North ^[12], D. Ajemoglu, D. Robinson ^[13], etc.). Within the framework of this area, it seems possible to trace the process of institutionalization of individual management structures, to study the mechanisms of their interaction and decision-making, to assess the role of formal and informal institutions in the field.

The purpose of the study was to study the organizational and legal foundations of the activities of local authorities during the NEP years from the standpoint of historical institutionalism.

The key conclusions were obtained as a result of the analysis of a significant set of sources. Thus, the legislative acts made it possible to trace the process of institutionalization of the Soviet management system and the budgetary system at the local level, determine the principles and mechanisms of functioning of these systems, and identify their potential limitations. And the materials of local office work and transcripts of meetings of the All-Russian Congress of Soviets provided a study of the process of consolidating various management practices, identified side effects arising from the implementation of specific legal norms (or in their absence), and identified ways to adapt local authorities to changes in legislation.

It should be noted that in the 1920s. The institute of Soviet lawmaking was undergoing the process of its formation. At that time, there was a specific and thematic diversity of legislative acts (decrees, resolutions, resolutions, regulations, appeals, proclamations, declarations, instructions, etc.) and there was no clear division of powers in the field of rulemaking (the All-Russian Congress of Soviets; the All-Russian Executive Committee (VTSIK) and the Central Executive Committee (CEC) of the RSFSR, and since 1924 G. The USSR and the Union Republics; the Council of People's Commissars (CPC), individual departments, as well as local Councils and executive committees), which could lead to the emergence of mutually exclusive norms and, as a result, to disorganization and disorientation of local authorities. It is also important to emphasize the framework nature of Soviet legislation, so that central and local authorities could adapt individual laws to the socio-economic conditions of a particular region, as well as adopt concretizing conjunctural additions to them. The presented features corresponded to the dynamic nature of state building in the USSR in the 1920s, testified to the search for an optimal management model and the plasticity of the Soviet system in conditions of weakness of formal institutions.

The results of the study

The first step of the Soviet government was to create a financial base for the activities of local authorities, which began with the separation of the local budget from the state budget. So, in 1921, by a series of decrees of the Council of People's Commissars and the All-Russian Central Executive Committee ("On local funds", "On the procedure for drawing up final estimates of income and expenses for 1922", "On local budgets") The territorial principle of forming local budgets was fixed. In general, the structure of expenditures and sources of local income were determined; the principle of financial independence of local authorities was approved, the division of the local budget into provincial, county, volost and city budgets was fixed, the procedure for drawing up, adopting and executing differentiated budgets was determined, and the deadline for their widespread introduction – 1922 was approved. Differentiated budgets meant the budgets of individual administrative units, which had to be developed and approved in accordance with the local conditions of a particular territory.

Gaps in Soviet legislation and the socio-economic situation in the country created obstacles to using the budget as a management tool. Along with the issue of powers, property rights and executive bodies of provincial, county, volost and city councils, the issue of income and expenses allocated to the budget of each level remained open. At the same time, mass starvation, hyperinflation, and a diverse money supply narrowed the budget planning horizon to 1-4 months. Under the circumstances, it was not possible to move to the widespread compilation and execution of differentiated budgets. The alternative was a single government-wide budget. In addition, in conditions of legal and financial uncertainty, arbitrary taxes were introduced en masse, and the practice of providing mutually beneficial services was consolidated between local authorities and various organizations (OGACHO. F. R-98. Op.1. D.131.).

The next step was the design of the provincial administrative office. On October 31, 1922, the regulation "On provincial Congresses of Soviets and provincial Executive Committees" was issued, which delimited the powers of the central and provincial authorities, shifting to the latter the solution of both local (housing, agriculture, forestry, etc.) and national issues (the Red Army, public education and health, etc.).

The provincial apparatus was represented by the relevant Congress of Soviets and its executive committee. Provincial congresses were subordinate to the All-Russian Congress of Soviets, the All-Russian Central Executive Committee and its Presidium. In the intervals between the congresses of soviets, full power belonged to the provincial executive committees, which included the provincial economic council and 13 departments: management, military, finance, agriculture, the Council of National Economy, Public Education, labor, the workers' and Peasants' inspectorate, food, health, political, communal and statistical.

In accordance with this provision, the provincial authorities controlled all government agencies and enterprises operating in the region; coordinated the activities of various departments and directed them, taking into account local specifics, with the right to suspend orders from authorized persons, and in emergency cases even with the right to remove them from office. Provincial executive committees could also send their representatives to meetings of higher authorities (the Central Executive Committee, the Council of People's Commissars, the Council of Labor and Defense), and, as a result, request the cancellation or amendment of their resolutions, which were deemed inappropriate for the area.

The presented powers indicate the formation of a "mechanism for protecting local interests", as well as the consolidation of the principle of "double subordination", which subsequently extended to the entire Soviet system of government at the local level. Their existence could lead to ambiguous consequences. On the one hand, the "mechanism for protecting local interests" ensured the flexibility of the management system, creating conditions for mutual control and building a dialogue between multi-level authorities. On the other hand, it could delay the process of coordinating the interests of various actors in regional development and lead to excessive bureaucratization, which was publicly condemned in the RSFSR. The principle of "double subordination" made it possible to take into account local socio-economic conditions in the implementation of state policy. But at the same time, it could lead to a blurring of the spectrum of responsibility between individual actors, leading to the problem of mismanagement, which became noticeable in the second half of the 1920s. Thus, at the XIII All-Russian Congress of Soviets, a delegate from the North Caucasus Region, T. Paderin, noted an interesting trend: "Institutions that are on the state budget are placed by their central People's commissariats in such a framework that we absolutely cannot help them in the field" (RSFSR. Congress of Soviets (13; 1927; Moscow). Moscow, 7th session. P. 5.).

As for the other powers of the provincial authorities, in the field of administration, they also issued resolutions and orders binding on the population and subordinate executive committees; they canceled some decisions of the county, volost, city and rural authorities. And in the financial and tax sphere, they developed rules and instructions defining the procedure for drawing up and executing local budgets; distributed income and expenses between budgets of different levels; introduced new local taxes, and also petitioned the NKF and NKVD for grants to cover budget deficits or co–finance certain sectors of the local economy.

The implementation of the decisions of the provincial executive committees was entrusted to their branch departments and subordinate authorities. At the same time, the principle of "double subordination" applied to industry departments: They were the executive bodies of both provincial executive committees and the corresponding People's commissariats. As a result, central departments could influence the economic and budgetary policies of provincial authorities through their branch departments using a variety of levers: decrees, orders, resolutions, instructions and plans. The question of the strength and direction of these levers remained open, especially in the context of the existence of an extensive system of personal connections that had been functioning since the civil war ^[14], and the weakness of formal institutions that were built "experimentally". Under the circumstances, there were even cases of sabotage of decisions of higher authorities, especially in remote parts of the RSFSR, such as Siberia ^[9]. Nevertheless, the principle of "double subordination" ensured the preservation of the potential for a "pendulum swing" of the system from decentralization to centralization throughout the NEP.

The principle of "double subordination" was also laid down as the basis for the relationship between the multi-level local authorities. Thus, the provincial branch departments were supposed to direct and unite the actions of the county departments after their appearance in 1924.

Thus, since the early 1920s, the dualistic nature of local Councils and executive committees began to manifest themselves, which simultaneously acted as local government bodies, which was reflected in their organizational and functional unity, and as local government bodies, which was reflected in their isolation, administrative, economic and financial autonomy.

November 23, 1923 With the introduction of the "Interim Regulation on Local Finance", the framework decrees of the Central Executive Committee and the Council of People's Commissars of 1921 were abolished, along with almost thirty additional or modifying decrees and resolutions adopted in 1922-1923. This was the first systematic act that established the hierarchy of institutions responsible for local finances, approved a detailed and uniform revenue and expenditure structure for all budgets, and determined the procedure for drafting, approving and executing local budgets.

Thus, the CEC, the Council of People's Commissars and the Council of Labor and Defense of the USSR developed and adopted legislation in the field of local finance, and monitored its implementation. The NKF of the USSR and the NKF of the Union Republics were responsible for drafting rules, instructions and clarifications on issues related, among other things, to the scope of the "Temporary Provision ...". Finally, the provincial authorities provided general management of local finances.

The adopted act did not differentiate income and expenses between the budgets of each level, so the provincial executive committee and its finance department were responsible for distributing the budget burden, taking into account the economic and financial situation of individual localities. The provincial authorities were given the opportunity to maneuver intra-regional means, including through the creation of a reserve fund. And when budget reserves were exhausted or unforeseen expenses appeared, it was possible to request "replenishment" from monetary and in-kind funds at the republican People's commissariats.

At the stage of developing the local budget, the county, volost and city authorities, as well as the branch departments of the provincial executive committee, could make their own adjustments to the revenue and expenditure estimates proposed by the provincial finance department. The grassroots Councils were assigned the role of an intermediary between the local community and the provincial authorities. They had no executive bodies and could not manage budget funds. The cash flows had to go through the branch departments of the provincial executive committee.

At the same time, the CEC and the Council of People's Commissars of the USSR received the right to transfer any national expenditures to local funds before the start of the budget period, and a year later, the right to withdraw local revenue sources. Thus, local authorities found themselves in a "limbo" state. Despite the completion of Sokolnikov's financial reform (1922-1924) and the stabilization of the ruble, the possibility of a transition to long-term (2-5 years) budgetary and, as a result, economic planning was limited.

The transition to a new administrative-territorial division (hereinafter AD), organized according to the principle of economic expediency, was supposed to ensure greater elasticity of local budgets and the possibility of maneuvering intraregional funds. Instead of the old provinces, counties and volosts, it was supposed to form enlarged regions (territories), districts and districts in accordance with local conditions.

The industrial Urals has become an experimental platform for the reform. On November 3, 1923, the regulation on the "Ural Region" was adopted, which, in addition to the status of territories, defined the structure and powers of the relevant local (regional, district, district) authorities. Thus, the regional executive committee formed a planning commission and 14 departments, including three new ones – administrative, social security and trade.

The powers of the regional executive committees were almost the same as those of the provincial ones. The regional executive committees could come up with a legislative initiative, and through the Presidium of the All-Russian Central Executive Committee, they could petition for changes to existing legal provisions in order to adapt them to the domestic and cultural-national conditions of the region. Also, through the Presidium of the Central Executive Committee, regional authorities could resolve acute conflicts arising in relations with central departments. The heads of the branch departments continued to be responsible both to the regional executive committee and to the advising People's commissariats. But the latter received the right to dismiss managers from their posts. Consequently, in the case of the Ural region, the principle of "double subordination" was expanded against the regional authorities.

In the financial and tax sphere, the regional executive committees retained control and regulatory functions, while all current work was transferred to the district and district administrative apparatus, which generally contradicted the "Interim Regulation on Local Finance."

The transition to a new administrative-territorial division began in the middle of the budget period, which had a painful effect on the work of local authorities in the newly formed Ural region and led to widespread budget deficits, which is a clear indication of the rush in matters of state building (the Regulations on the Ural region and the procedure for its introduction // Materials on the zoning of the Urals. Vol. 1. Moscow, 1923. pp. 1-28.)

On the scale of the RSFSR, the process of zoning lasted for 6 years. By 1929 By a series of resolutions of the All-Russian Central Executive Committee, 7 territories were formed (North Caucasus, Siberian, Far Eastern, Lower Volga, Northern, Nizhny Novgorod, and Middle Volga) with a similar structure and slightly different powers of local authorities. In addition, the borders of 5 enlarged regions (Leningrad, Central Chernozem, Ivanovo Industrial, Moscow, and Western) were defined, with respect to the administrative apparatus of which regulations governing the activities of provincial, county, and volost authorities continued to apply. Thus, until the end of the 1920s, the legal status of local authorities in different regions of the RSFSR differed in terms of the scope of powers, the mechanism for protecting their own interests, and the principle of "double subordination."

Another important fact related to the administrative division reform should be noted. The beginning of administrative transformations occurred mainly in the middle of the budget period, which obviously affected the economic and budgetary policies of local authorities undergoing structural changes.

In 1924, before the start of the active phase of zoning, the decentralization process spread to the county and volost administrative apparatus. An important step was the adoption by the Central Executive Committee on October 16 of two regulations: "On county congresses of Soviets and County Executive Committees" and "On Volost Congresses of Soviets and Volost Executive Committees."

The structure of the county authorities corresponded to the provincial one: it was represented by the corresponding congress of soviets, the executive committee with branch departments (their number could vary) and the Presidium. The regulation "On County Congresses of Soviets and their executive Committees" established a mechanism for protecting county interests. Thus, the county executive committees could apply to the people's commissariats through the provincial authorities or directly; initiate petitions to the provincial executive committees or the Presidium of the All-Russian Central Executive Committee to amend the resolutions and orders of the central authorities in relation to this county; suspend, under collective judicial responsibility, the implementation of orders of departments of the provincial executive committee, which contradicted the resolutions of the central and provincial authorities. Thus, the county executive committees received administrative resources with which they could "influence" the decision-making process at higher levels of government, including bypassing the provincial executive committees. Theoretically, this could lead to conflicts between the provincial and county administrations.

The volost administrative apparatus, represented by the Congress of Soviets and its executive committee, had fewer administrative resources to protect its interests. Volost executive committees could send their representatives to meetings of the county executive committee, petition through it for the cancellation of decisions of higher authorities that were deemed inappropriate under local conditions. In general, they had less freedom in making decisions.

The decentralization process involved the transfer of some powers from provincial authorities to the county and volost levels, including in the financial and tax sphere. Thus, the county executive committees dealt with the distribution of income and expenditure sources between the county, volosts and cities; compiled the budgets of the county and the county town; approved the budgets of the volost executive committees and city councils. And the volost authorities were responsible for drawing up and executing their own budget within the limits set by the county executive committee.

The RSFSR's management system was closed by city and village councils. The latter, in accordance with the decree of the All-Russian Central Executive Committee of October 16, 1924 "On village Councils", found themselves in a subordinate position. Their activities were more organizational than managerial in nature.

Until the end of 1925, city councils, with the exception of Councils of small towns and urban-type settlements that had their own executive committees, were served by the apparatus of provincial and county executive committees (in exceptional circumstances, volost). In the case of administrative centers, the Presidium of provincial and county executive committees were the Presidium of the corresponding city Councils (Regulations on the Councils of provincial, county and provincial towns and urban-type settlements // Collection of laws and regulations of the Workers' Peasant Government for 1922 Department One. Moscow, 1950. pp. 163-171.). Thus, until the mid-1920s, the directions of urban development were actually determined by the provincial and county authorities.

The "Regulations on City Councils", adopted in October 1925, eliminated the existing contradictions only partially. The city authorities have been given broad powers, including the right to independently develop and approve the city budget. The implementation of the decisions of the city council was entrusted to its sections, the Presidium and the municipal department. However, the technical execution of all other work was assigned to the branch departments of the provincial and county executive committees, in which separate parts with office management, accounting and reporting of an urban nature were allocated. Thus, the principle of "double subordination" also worked in relation to the executive bodies of city councils. At the same time, a mechanism for protecting local interests was not established, which put the city authorities in a vulnerable position, allowing them to expand the burden placed on them.

The powers of the city authorities in the field of industry deserve special attention. They could operate enterprises under their jurisdiction, approving their production plans, estimates and reports; manage enterprises subordinate to the highest authorities on the authority of the latter; and also supervise all enterprises and institutions not under the jurisdiction of city councils without interfering in their work, but with the provision of all possible assistance. Consequently, additional conditions appeared for blurring the spectrum of responsibility between the sectoral people's commissariats, regional and city authorities.

With the expansion of the administrative and economic powers of local authorities and the deepening differentiation of local budgets, it became necessary to rework the "Interim Regulation on Local Finance."

On April 25, 1926, the regulation "On Local Finances" was adopted, which expanded and detailed the list of local revenues and expenditures, and also fixed the volost (district), city and their corresponding budgets as the main local budgets. County (district) and provincial (regional, regional) budgets have acted as regulatory ones since 1926. The development, discussion, adoption and execution of local budgets were assigned to the subject executive committees or the presidium of city Councils.

Three types of funds were created to overcome the crisis, ensure the elasticity of local budgets and reduce dependence on government "offsets".:1) special purpose funds (industrial, worker housing and road construction), 2) regulatory funds (national and local) and 3) subvention fund. Special purpose funds were intended to co-finance certain branches of the local economy. They were completed within specific local budgets and used to meet the financial needs of the advisory executive committees and city councils. Regulatory funds were created to ensure the balance of local budgets and to overcome inequalities in the development of individual areas. Contributions to these funds were made from the funds of the most powerful local budgets, and the distribution of benefits was handled by provincial (regional) and county (district) executive committees. From the subvention fund, replenished from the republican budget, local authorities could request benefits for targeted needs. However, in case of deviation from the goal, the allocated funds were subject to refund.

With the advent of regulatory funds, a semi–formal institution gradually began to take shape in the field, in relation to which the author of the article suggests using the term "donor-recipient" relationship system. The role of the donor was performed by industrial centers, as a rule, administrative centers that had the potential for development. And the role of the recipient is played by financially weak administrative units (districts, work settlements, small towns). Donation became a heavy burden for some city councils, as the amount of deductions could range from 5 to 30% of all expenditure obligations. Nevertheless, the "donor-recipient" relationship system became a mechanism that supported the sustainability of local budgets in the face of rising spending obligations and the loss of local revenue sources.

In some cases, city councils lost funds placed in special purpose funds (OGACHO. F. R-184. Op.1. D.71.), which indicates abuse by higher authorities, who could perceive the position of senior officials as a direct call to action: "In the future," People's Commissar of Finance N. A. Milyutin noted in 1927, "our policy in the field of allocating funds from regulatory funds should be further strengthened in the direction of pulling in particularly lagging, especially low–power areas, so that over the coming years the difference, which will inevitably remain for a long time, due to the different economic power of individual units and our individual provinces, regions and republics, nevertheless, if possible, to further reduce..." (RSFSR. Congress of Soviets (13, 1927; Moscow). Moscow, 6th session. pp. 2-17.).

Under the circumstances, the city councils had to compensate for budget losses with the help of various tricks.: 1) obtaining loans for the implementation of long-term infrastructure and housing and communal projects; 2) transferring local utilities (for example, baths or sewage storage facilities) to self-financing; 3) shifting the financial burden to state, public or cooperative organizations or switching to the practice of "mutual settlement" with them; 4) refusing to solve problems located in the disputed area of responsibility. The side effect of such a policy was manifested not only in slowing down the pace of urban economic recovery, but also in the deterioration of the situation in a number of its areas ^[11].

In the second half of the 1920s, local budget planning was still limited. The rule of law continued to apply, allowing the CEC and the Council of People's Commissars of the USSR to transfer national expenditures to local funds and withdraw some revenue sources.

In 1927, local representatives used the XIII All-Russian Congress of Soviets as a platform for discussing the problem of budget uncertainty. Thus, a delegate from the Siberian Territory, T. Remeyko, noted: "Firstly, more planning is needed in budget work, secondly, it is necessary to set the amount of revenue to the local budget in a timely manner, and thirdly, it is necessary to consolidate these revenues for a number of years so that local authorities have the opportunity to regions, provinces and districts should carry out more systematic work in the field of the budget..." (RSFSR. Congress of Soviets (13;1927; Moscow). Moscow, 6th session. pp.24-25.). A similar position was held by the delegate from Vyatka province, T. Shilyaev: "I think it's time to resolve the issue of securing income sources for places. If we don't know how much our estimates for next year will increase, then at least we know the estimated receipts for the current year. These receipts must be firmly secured for the places. You need to indicate that you can expect to grow by, say, no more than 10% next year. If places had 90% of firmly anchored income sources, then we would have had every opportunity to plan our economy, carry out our economic activities flawlessly, and in no way would we have allowed the matter to collapse" (RSFSR. Congress of Soviets (13; 1927; Moscow). Moscow, 6th session, p. 37.). Thus, representatives of the localities saw a way out in strengthening the planned start.

The question remains whether these statements reflected an actual problem or were opportunistic in nature and were made in the light of the beginning of industrialization, which implied a transition to strict planning. Nevertheless, the requirements of the places were taken into account.

In February 1928, the Presidium of the Central Executive Committee of the USSR issued a resolution "On the organization of city councils in the USSR ...", according to which the city councils were given a fixed list of revenue sources capable of ensuring a deficit-free budget. However, now the higher executive committees could influence the budget policy of the city authorities by making adjustments to their revenue and expenditure estimates. Otherwise, the powers of local authorities remained low until the early 1930s.

Conclusion

Thus, the specifics of the Soviet institution of lawmaking, the haste in matters of state-building, the dualism of local authorities, the principle of "double subordination" and the "mechanism for protecting local interests" created conditions for: 1) an increase in conflict potential in the field of governance (mutual control, the imposition of powers and interests of various actors of regional development, the emergence of disputed areas of responsibility mismanagement, sabotage of decisions of higher authorities); 2) building semi-formal (provision of mutually beneficial services, introduction of arbitrary taxes, registration of a system of donor-recipient relations) and informal institutions (systems of personal connections) designed to compensate for the shortcomings of the system and stabilize it; 3) as well as preserving the potential for a "pendulum swing" of the system from decentralization to centralization throughout the NEP.

The author suggests that these features, along with side effects, could affect the susceptibility of local authorities to institutional pressure, as well as their ability to maintain their former position when the economic and political course of the current government changed at the turn of the 1920s and 1930s. At the same time, it is possible that the heterogeneity of the cultural and institutional landscape of the RSFSR regions could generate variability in the models of "resistance" and "adaptation" of local authorities. Consequently, it is becoming promising to study individual regional cases during a period of large-scale transformational shifts.