Administration and Defence: More Spending, Less Efficiency. FBK ‘How Much is Russia’ Study

Under the next stage of studying “How much is Russia: 10 years later” the cost estimating was carried out for the economic activity of ‘Public administration and military security; mandatory social security’. The segment value has decreased over the last 10 years by 1.5 times and amounts to 177.8 bn roubles.

According to Igor Nikolayev, the FBK Institute of Strategic Analysis director supervising the research, such decline occurred despite the fact that the total consolidated budget expenditures for ‘Public administration’, ‘Judicial authority’, ‘National defence’, and ‘Law enforcement and National security’ nominally increased by 7.4 – from 871.4 bn roubles in 2003 (22% of consolidated budget expenditures) up to 6.4 bn roubles in 2014 (19.7% of consolidated budget expenditures).

The share of administration and defence in the total gross value added has significantly increased. If in 2002 Russia with the indicator of 4.5% was ahead of only Rumania (4.4%) and Ireland (4.3%) out of the group of countries under consideration, in 2012 with the indicator of 5.8% it was already ahead of Australia (5.3%), Great Britain (5.2%), Sweden (4.7%) and was behind Cyprus (10.7%) and Greece (9.9%) only.

And the number of those employed in the public administration sector grew accordingly. During the decade their number increased by 18.9% (from 3.14 to 3.73 mn people), and the number of public authorities (ministries, federal services and agencies) increased from 60 in 2002 to 81 as of May 2014.

And the comparison of ‘public administration’ indices, which are calculated by the World Bank, shows that by all the indicators (taking into account public interests, political stability and absence of violence /terrorism, government efficiency, quality regulators, abidance by the law, corruption) without exception Russia has rolled back significantly over 10 years.

You can find more detailed research materials at skolko.ru.