Features, capabilities, and limitations of the methods for managing budget expenditures on social assistance to the population

Romaikin Pavel Denisovich ORCID: 0009-0006-3423-4405 Postgraduate student; Department of Public Finance; Financial University under the Government of the Russian Federation 49/2 Leningradsky Ave., Moscow, 125167, Russia p.romaikin@mail.ru Other publications by this author

Introduction

Poverty and income inequality are the most serious social challenges for the modern economy, which is recognized both by international institutions (for example, within the framework of the United Nations sustainable Development agenda ^[1]) and at the level of individual economies. In the context of the national development goals set by the President of the Russian Federation to reduce poverty and inequality by 2030, the decisions taken by financial system management entities in 2018-2024 were characterized by a rapid increase in budget expenditures (primarily federal budget expenditures) on social assistance to the population. Thus, a comprehensive support system for low-income families with children under 17 was created and federal co-financing of regional budget expenditures on social assistance under a social contract was introduced ^[2]. The planned expenditures of the federal budget under the section "Social Policy" in 2025-2027, in accordance with the federal law "On the Federal Budget for 2025 and for the planning period of 2026 and 2027", amount to more than 21 trillion rubles (more than 16% of all planned expenditures of the federal budget for the specified period), a significant part of which corresponds to the measures social assistance provided to people with low incomes or risks of reducing them. At the same time, social policy issues are still rarely discussed in the scientific community in the context of strategic budget expenditure management ^[3].

Thus, the need to achieve the set national goals and the effective use of significant amounts of budget funds actualizes research aimed at a theoretical rethink of budget spending management for social assistance.

Literature review

The evolution of views on public and municipal finance management took place in the context of a broader transformation of approaches to public administration in general. The transition from the bureaucratic (Weberian) model of government to the "new" state management (New Public Management) marked corresponding changes in the field of financial management of public legal entities ^[4,5]. Thus, in the concepts of New public Financial Management and public Expenditure Management, in contrast to traditional (cost–based, article-by-article) budgeting, the need to monitor the effectiveness and efficiency of budget expenditures in the context of a given system of goals and indicators (results-based budgeting) was justified ^[6]. One of the main forms of BOR has become program-oriented management, in which the implementation of budget expenditures is associated with the formation of appropriate targeted programs that aggregate a set of measures aimed at achieving a certain result.

Over the past 20 years, the mechanisms of program-oriented cost management have been discussed in the scientific community in the context of their conceptual ^[7,8] and instrumental ^[9,10] modernization. Understanding the limitations of the tools used ^[11] led to the justification of the need to introduce a project-based method of budget expenditure management, characterized by a closer alignment of planned results and the financial resources spent on achieving them ^[12]. However, despite the fact that the theoretical aspects of budget expenditure management in terms of the main methods (cost ^[13], program-targeted ^[10,11], project ^[12]) are generally described in the scientific literature, their application to certain areas of expenditure (in particular, for social assistance) remains not fully understood. Thus, in most scientific papers devoted to the financial aspects of the organization of social protection and social assistance, researchers limit themselves to stating the benefits of program-oriented budget expenditure management known to science ^[14], but do not disclose the content of the latter in the context of the specifics of social assistance tools (for example, programmatic measures to overcome poverty ^[15]). In turn, for foreign authors, who focused primarily on the econometric assessment of the effectiveness of certain social support measures, the issues of managing relevant budget expenditures, most often, also remained secondary ^[16,17].

Nevertheless, the theory of social protection is currently actively developing in the context of the observed expansion of social support programs in developing countries. Within the framework of this study, it is advisable to focus on two aspects of the ongoing scientific discussion. On the one hand, it has already become traditional to compare the expediency and effectiveness of "categorical" (assigned based on the membership of the population in a certain category: large families, single-parent families, the disabled, etc.) ^[18] and "targeted" (assigned based on the assessment of the income level of the population in relation to the established poverty line) ^[19] measures support services. A relatively new area of analysis is the juxtaposition of "conditional" and "unconditional" social transfers. Thus, "unconditional" social transfers, including the targeted and categorical instruments described above, imply payments to aid recipients without any obligations of the latter (i.e., the only criterion for providing unconditional assistance is the potential recipient's compliance with legislative requirements). In turn, "conditional" social assistance tools are not only targeted, but also contain requirements for recipients to take actions aimed at improving their living situation, which may be related to the recipient's acceptance as economic (employment, vocational training, other income-generating activities, etc.) ^[20,21] as well as social (implementation of measures in the field of health or education for oneself and children) ^{[22, 23]} obligations.

Taking into account the above, the purpose of this article is to carry out a theoretical analysis that reveals the specifics of the application of budget expenditure management methods for various types of social assistance, which will eliminate the existing research gap in the synthesis of the provisions of the theory of budget expenditure management and the theory of social protection.

Results and discussion

In accordance with the stated purpose of the study, it is advisable to analyze the features, capabilities and limitations of the main methods of budget expenditure management in the context of the types of social assistance tools (corresponding to the basic classifications described above), which allows reflecting the specifics of managing a specific type of budget expenditure. The results of the author's theoretical analysis of the applicability of cost management methods to various types of social assistance tools are presented in Table 1.

Table 1 – Features, opportunities and limitations of applying budget expenditure management methods to various types of social assistance tools

Source: suggested by the author

Thus, the unconditional categorical instruments of social assistance are aimed at supporting legally established categories of citizens, i.e. They do not take into account any other socio-economic parameters that characterize the condition of aid recipients. In this regard, the establishment of any target indicators necessary in the case of the implementation of program-target and project management methods does not seem justified. For example, setting a target indicator by income level for large families (as a socially vulnerable category) is a formally possible procedure (this will not entail changing the type of instrument, since income level will be only a target value, and not a criterion for selecting recipients of assistance), however, it will raise practical issues in terms of subsequent financial support for social benefits. With any rationally defined management criterion, there will be specific households that have exceeded the target level, but their receipt of payments cannot be limited, as this will lead to the transition of the instrument to an addressable form. Thus, the program-oriented (and, consequently, project-based) method of budget expenditure management is redundant when managing social assistance instruments, the beneficiaries of which are determined solely on a categorical basis.

In turn, unconditional targeted social assistance tools are aimed at maintaining a legally fixed minimum income level. In this case, the application of the project method of budget expenditure management is limited by the lack of a potentially unique result necessary for project financing: targeted transfers are focused on the annual maintenance of specified income levels, i.e. they are long-term and permanent. The costly management method is not economically feasible, since it does not provide a relationship between the target income level of recipients and their actual incomes. Thus, the priority method of managing budget expenditures for unconditional targeted social assistance should be considered the program-target method, in which budget financing is determined based on the need to bring the recipient's income to a minimum level that ensures the achievement of the poverty target.

Conditional social assistance tools are a priori aimed at changing the behavior of the recipient of assistance in any area of public relations, i.e. each recipient of social assistance is characterized by a unique qualitative result, which can be achieved only within the framework of project management, characterized by more targeted solutions than costly and program-targeted methods. Thus, the financing of conditional social assistance instruments, in accordance with the objectives of the instrument, should be determined by a number of qualitative and quantitative characteristics that make it possible to effectively spend budget funds for each specific recipient.

Thus, when managing budget expenditures in each specific case, it is necessary to take into account the specifics of the management object – the social assistance tool. In particular, from a practical point of view, it is not enough to achieve a high share of program expenditures in the budget structure, which is typical for the modern Russian budget process. Making a choice between implementing a costly, program-oriented or project-based management method should be justified by the goals of a specific social assistance tool, and not be set solely in the context of the general trend in the development of the financial management system.

At the same time, it is necessary to identify the limitations of the theoretical analysis carried out.:

First, only the "ideal" types of designated social assistance tools were considered, without taking into account possible "mixed" types, as well as possible synergistic effects from the joint use of different types within the framework of a common social protection system.;

Secondly, when analyzing the possibilities and limitations of using management methods, the author was guided by the principle of economic expediency, manifested in this case through the correspondence of the purpose of spending and the purpose of the social assistance tool, i.e. cases of formal applicability of the management method (only in terms of the composition of procedures) were characterized as limited applicability.;

Thirdly, the author considered only meaningful indicators as target indicators of program and project management tools, which do not have the character of stating the formal number and proportion of aid recipients.

Based on the formulated theoretical provisions, it is advisable to propose ways to modernize the implementation of budget expenditures on social assistance to the population in the Russian Federation.

Thus, in terms of applying the program-targeted method of budget expenditure management to unconditional targeted social assistance tools, in accordance with the strategic nature of the goals outlined above, it is necessary to ensure an unambiguous relationship between strategic goal-setting and the functions of specific social assistance tools and their financial support.

Currently, the main programmatic and targeted tool for implementing social policy in the Russian Federation, in accordance with the Unified Plan for Achieving National Development Goals (approved by the Government of the Russian Federation), is the state program of the Russian Federation "Social Support for Citizens" (hereinafter referred to as the state program), whose activities are aimed, inter alia, at reducing poverty and inequalities. However, in the current version of the passport of the state program, the impact of individual social support measures on the national poverty reduction goal is indicated through indirect indicators of the functioning of the support system that cannot be directly correlated with the poverty level indicator. The goal of reducing inequality has not been set at all. Thus, of the 4 indicators of the program related to the national poverty reduction goal, 2 are technical (the proportion of proactive support measures and the proportion of requests processed through a Single Contact Center), 1 is formal (maintaining at the level of 100 percent the proportion of citizens who received social support among eligible citizens and applied for it), and only 1 relates to changes in the income level of citizens (the latter indicator, however, is associated with only one measure of social assistance – a social contract that does not relate to unconditional transfers) ^[24].

Thus, neither the objectives of the program nor its indicators contain a direct indication of the poverty targets set in the national development goals. Of course, the indicators of the number of recipients of social benefits currently contained in the passport of the state program may be additional indicators indicating the coverage of the population with social support, but they cannot be an end in themselves for the implementation of measures.

Taking into account the above, it is necessary to ensure:

1. inclusion of the poverty level of the population and the Ginny coefficient in the list of target indicators of the state program of the Russian Federation "Social support for Citizens" and the establishment of target values of indicators corresponding to the formulations of national development goals: reducing the poverty rate to 7% and the Gini coefficient to 0.37 by 2030;

2. linking the volume of financing of unconditional targeted social assistance instruments with the specified target values, which can be organized by directly determining the amount of cash payments as the difference between the recipient's subsistence level and the actual amount of his income (unlike existing discrete schemes ^[2]).

In turn, the toolkit of conditional social transfers in the Russian Federation is implemented through the mechanism of a social contract. This type of social assistance is provided to the population on condition that potential recipients fulfill their obligations in one of the possible areas of social adaptation: employment (including vocational training), starting their own business, maintaining a personal subsidiary farm, and other measures to overcome a difficult life situation ^[25]. Currently, the rules for the provision of a social contract include two indicators of its effectiveness: the proportion of poor people covered by the social contract and the proportion of recipients of social contract assistance whose incomes exceeded the subsistence level.

It should be noted that in accordance with the revealed design nature of conditional social transfers, including their focus on achieving unique results, the system of control indicators should ensure effective spending of budget funds in the context of each recipient of assistance. It seems obvious that the existing indicators, reflecting only the formal fact of overcoming poverty within the limited analyzed period, do not take into account the specified features of the project method of budget expenditure management.

In this regard, it is proposed to supplement the above-mentioned indicators, the achievement of which is ensured by the activities of the federal project "Assistance to the subjects of the Russian Federation in the implementation of targeted social support for citizens", with the following indicators:

1. the ratio of the recipient's income received as a result of social contract measures to the subsistence level – the indicator allows not only to determine the recipient's exit from the poverty zone, but also to assess the scale of the newly created income;

2. the level of stability of the created source of income, years – the indicator requires a personalized assessment of the dynamics of income from the source created as a result of social contract measures (wages, profits, etc.); calculated based on the total number of years during which the income level of the recipient of assistance has not again decreased to the subsistence level, allowing to assess the stability of income of recipients social assistance for a longer period than the existing term of the social contract (no more than 12 months).

Thus, the results of the theoretical analysis open up the possibility of scientific substantiation of the directions of modernization of financial support and evaluation of the effectiveness of existing social assistance tools within the framework of the software and project tools for budget expenditure management operating in Russia.

Conclusion

Thus, in the article, the author synthesizes the provisions of the theory of budget expenditure management and the theory of social protection in terms of a functional comparison of existing methods of budget expenditure management and the main types of social assistance tools. The results of the study indicate that it is possible to unambiguously compare the type of social assistance tool and the method of managing related expenses based on the identified features, capabilities and limitations of the latter, which is a new result in the discussion on improving budget expenditure management. The formulated theoretical provisions eliminate the research gap stated in the purpose of the work and can be used for practical purposes in the implementation of state (municipal) financial policy. Based on the presented provisions, possible directions for the modernization of the existing architecture of social assistance instruments within the budget system of the Russian Federation are formulated. The results of the work can become the basis for further practice-oriented research on the modernization of financial support for social assistance in the Russian Federation.

Thanks

The author expresses his gratitude to Yulia Gabdrashitovna Tyurina, Scientific supervisor (Doctor of Economics, Professor of the Department of Public Finance at the Financial University under the Government of the Russian Federation) for her assistance in planning and organizing the research.