Organization of Local Government and the State of Local Budgets of Germany and the Russian Federation: Comparative Analysis

Realignment of local governments territorial organization and its financial capabilities has for a long time been one of the priorities of the economic policy in the Russian Federation. The practice of progressive advance and municipal infrastructure development is characteristic for Germany as well, thus research study of the current trends, the state of Russian and German local government and the municipal budgets of the last decade is especially important in the current situation, characterized by high level of instability in all countries. The article analyzes the experience of territorial realignment of local government in Germany and the Russian Federation (2006 to 2016), identifies general and specific features of such change, and compares the specific series of municipal government density of these countries to test the hypothesis of influence of the realignment on local budgets. The author made the sequence analysis of both countries local budget receipts, expenditures and sustainability based on taxonomy and similarity of public finances statistics of Germany and the Russian Federation (2007-2016). The author suggested a series of relative index equivalents; on their basis, she made the comparison and conclusions on the Russian Federation and German Federal Republic municipal governments structure of receipts and expenditure during the realignment of local government. The aforementioned hypothesis is proven only partially true. The analysis data can be useful for further studies on municipal finances of Germany and the Russian Federation in order to determine the feasibility and appropriateness of using foreign experience in Russian conditions.