Experience in Implementing Social Benefits Monetization Reform in Russia; Literature Review
The present paper is an integral part of the "Preparation of the strategy for social benefits monetization reform in Ukraine" project, co-financed by the 2008 Polish aid programme of the Ministry of Foreign Affairs of the Republic of Poland and carried out by CASE in 2008. The paper was prepared as background material aimed at obtaining a better understanding of the main bottlenecks in reforming a vast in-kind benefits system typical for many countries of the Former Soviet Union (FSU). The paper focuses on the following issues: aims and motives of monetization reforms in Russia; expected outcomes of the reform; description of the implementation process; changes of the roles of various actors and agencies; compensation of housing and communal services (HCS) expenses in the course of HCS and monetization reforms; and the major gains and failures of the reform. The paper concludes with lessons that can be derived from the Russian monetization experience for the planned Ukrainian monetization reform. The paper is based on extensive research on the monetization reform in Russia and literature published by leading Russian independent research centers including the Independent Institute for Social Policy (IISP), the Institute for Urban Economics, the Centre for Economic and Financial studies (CEFIR), and the Institute for the Economy in Transition (IET).
Reform of in-kind benefits in Russia
Based on national legislation passed in the summer of 2004, Russia implemented wide-ranging changes to its system of category-based social benefits in January 2005. Implementation difficulties made headlines around the world. This article discusses the structure of the reforms and examines the extent to which they: (a) reduce or eliminate the categorical allocation of public resources; (b) replace in-kind benefits with cash transfers; and (c) target benefits, in whatever form, to low-income people. The overall conclusions are that the reforms score very badly against criteria (a) and (c), but get a middling score for cashing-out benefits.
Participation in a decentralised housing allowance programme in a transition economy
When Russia's housing allowance programme, the country's first means‐tested programme, was introduced in 1994, it was truly innovative. However, there were difficulties from the start, many arising from the division of authority for setting programme parameters among different levels of government and the potential for variation in the treatment of similar households in different cities. In 1996, the programme's original simple basis for benefit determination was seriously impaired by the introduction of different principles for very low‐income households. Moreover, local governments have exhibited a willingness to vary benefits from year‐to‐year, depending on political and budgetary considerations. The analysis presented here documents the impact of these variations on participation rates in a sample of Russian cities. Large inequities are obviously present in the treatment of similar households from city to city. Indeed, it is questionable whether the programme as currently configured is fulfilling the social safety net function envisioned for it in the original legislation.