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ABSTRACT
This article proposes a transparent method for collecting, structuring, and analyzing Russian budget data on defense and security-related expenditures. A precise answer to the question of how big Russia’s defense expenditures are is impossible because of issues concerning secrecy and accounting principles. We circumvent this challenge by constructing lower and upper bounds for Russia’s military expenditure, showing that depending on the chosen measure these have increased from the range of 10.3–31.2% of federal expenditures in 2011 to 12.9–35.4% in 2018. The analysis also yields additional insights into the concept of secrecy in the Russian budget; we show that 39 out of 96 subchapters in the Russian budget contain secret expenditures, many of which are not nominally related to defense or security, and that secret expenditures increased as a share of total expenditures from 12% to 17% between 2011 and 2019.
Supplementary material
Supplemental data for this article can be accessed here.
Notes
1. An alternative approach is taken by Harrison (Citation2003), who develops a principal-agent model to explain how secrecy helped the Soviet government to inhibit theft by making data secret and to inhibit lobbying by making economic decision processes secret, thereby contributing to an equilibrium in the command economy. In this model, the principal (the state) opted for secrecy to combat opportunistic behavior on the part of the agents (defense contractors). This suggests that secrecy can have a role to play in combating corruption, but leaves out possible collusion between principals and agents in a market-oriented economy that would have the opposite effect.
2. Cooper (Citation2013, 17) reports that military pensions were moved in 1996 from chapter 0200 National Defense to chapter 1000 Social Policy.
3. See Federal Law 159-FZ of 26 April 1999 “On the Entry into Force of the Budget Code” (O vvedenii v deistvie Byudzhetnogo kodeksa Rossiiskoi Federatsii).
4. Among the measures surveyed by the IBP is whether a country publishes a so-called “citizens budget,” a document aimed at making the budget accessible to the wider public. Russia has set up a special website for this purpose which includes useful reference material (https://budget.open.gov.ru/). For an example of a citizens budget, see MinFin (Citation2018a). This initiative is part of a larger resource in the form of a unified Internet-based electronic portal for the entire Russian budget system, where much of the legislative and operational information concerning the budgets is summarized and presented in an accessible format, including data on regional budgets: https://budget.gov.ru/.
5. We are grateful to one of our anonymous referees for pointing this out. Interestingly, Zatsepin (Citation2008) notes that the total number of secret appendices increased fourfold in the federal budget for 2008.
6. The Duma operates a website that contains the documentation at the various stages of legislation of all federal laws, from the initial draft to the final law, including explanatory notes and other documentation. For example, the documentation concerning the budget for 2019 (legislation draft No. 556362–7) can be obtained from the following address: http://sozd.duma.gov.ru/bill/556362-7 (accessed February 2019).
7. Full reference: Federal law No. 459-FZ of 29 November 2018 “On the Federal Budget for 2019 and the Planning Period 2020 and 2021” (Federal’nyy zakon ot 29 noyabrya 2018 goda N 459-FZ “O federal’nom byudzhete na 2019 god i na planovyi period 2020 i 2021”). A digital copy of the official version of this law is available at: http://publication.pravo.gov.ru/Document/View/0001201811300026 (accessed May 2019).
8. Roskazna’s budget execution reports naturally only contain historical data; to obtain summaries at the chapter level it is necessary to use other sources. We have used the so-called Citizens’ budget already mentioned (MinFin Citation2018a). However, this source does not include summaries at the subchapter level, only the chapter level.
9. The open expenditures in this subchapter include subsidies to the city of Baikonur in Kazakhstan, home to the eponymous space port operated by Russia. In accordance with an agreement between Russia and Kazakhstan, it is fiscally integrated into the Russian budget system and recognized as a city of federal importance, a status similar to that of Moscow, St. Petersburg, and Sevastopol but without parliamentary representation.
10. Full reference: Federal law No. 61-FZ of 31 May 1996 “On Defense” (Federal’nyy zakon ot 31 maya 1996 g. N 61-FZ “Ob oborone”).
11. Full reference: Presidential decree No. 1265 of 30 September 2011 “On the Military Rescue Formations of the Ministry for Civil Defense, Emergency Situations, and Emergencies and Elimination of Consequences of Natural Disasters of the Russian Federation” (ukaz prezidenta RF ot 30 noyabrya 2011 g. N 1265 “O spasatel’nykh voinskikh formirovaniyakh Ministerstva Rossiiskoi Federatsii po delam grazhdanskoy oborony, chrezvychaynym situatsiyam i likvidatsii posledstvii stikhiinykh bedstvii”).
12. Full reference: Federal law No. 275-FZ of 29 December 2012 “On the State Defense Order” (Federal’nyy zakon ot 29 dekabrya 2012 g. N 275-FZ “O gosudarstvennom oboronnom zakaze”).
13. Full reference: Government decree No. 1255 of 26 December 2013 “On the Rules for Drafting the State Defense Order and its Main Parameters” (Postonovlenie pravitel’stva RF ot 12 dekabrya 2013 g. “O Pravilakh razrabotki gosudarstvennogo oboronnogo zakaza i ego osnovnykh pokazatelei”).
14. Full reference: Federal law No. 150-FZ “On Weapons” of 13 December 1996 (Federal’nyi zakon ot 13 dekabrya 1996 goda N 150-FZ “Ob oruzhii”). The law lists the militarized organizations by their respective functions rather than by name, but can be assumed to include the following: the Ministry of Defense, the Ministry of the Interior, the National Guard, EMERCOM, the Federal Security Service (FSB, Federal’naya sluzhba bezopasnosti), the Foreign Intelligence Service (SVR, Sluzhba vneshnei razvedki), the Federal Protective Service (FSO, Federal’naya sluzhba okhrany), the State Courier Service (GFS, Gosudarstvennaya fel’d”egerskaya sluzhba), the Federal Penitentiary Service (FSIN, Federal’naya sluzhba ispolneniya nakazanii), the Federal Bailiffs Service (FSSP, Federal’naya sluzhba sudebnykh pristavov), the Federal Customs Service (FTS, Federal’naya tamozhennaya sluzhba), the Main Directorate of Special Programs of the President (GUSP, Glavnoye upravleniye spetsial’nykh programm Prezidenta), the Prosecutor’s Office (Prokuratura), and the Investigative Committee (SK, Sledstvennyi komitet).
15. Specifically, this unit is the Directorate for the Organization of Mobilization Preparations of the Department for State Service and Personnel of the Ministry of the Interior (Upravleniye organizatsii mobilizatsionnoi podgotovki Departamenta gosudarstvennoy sluzhby i kadrov Ministerstva Vnutrennykh Del).
16. Full references: Federal Law No. 53-FZ of 3 March 1998 “On Military Duty and Military Service” (Federal’nyy zakon ot 28 marta 1998 goda N 53-FZ “O voinskoi obyazannosti i voennoi sluzhbe”) and Federal Law No. 76-FZ of 27 May 1998 “On the Status of Military Personnel” (Federal’nyy zakon ot 27 maya 1998 goda N 76-FZ “O statuse voennosluzhashchykh”).
17. Similar to the law “On Weapons,” the specific government entities are not listed by name in the law on military service, but rather by function, but can be assumed to include the following: the Armed Forces, the National Guard (also referred to as “other troops” [drugie voiska]), the military rescue formations of the EMERCOM (also referred to as “military formations” [voinskie formirovaniya]), the Foreign Intelligence Service (SVR, Sluzhba vneshnei razvedki), the Federal Security Service (FSB, Federal’naya sluzhba bezopasnosti), the Federal Protective Service (FSO, Federal’naya sluzhba okhrany), the military prosecutor authorities (organy voennoi prokuratury), the military investigative authorities of the Investigative Committee (voennye sledstvennye organy Sledstvennogo komiteta), the federal authority in charge of organizing mobilization preperations of federal authorities (federal’nyy organ obespecheniya mobilizatsionnoi podgotovki organov gosudarstvennoi vlasti) (collectively referred to as “authorities” [organy]), military units of the Federal Fire Service (voinskie podrazdeleniya federal’noy protivopozharnoi sluzhby), and special formations (spetsial’nye formirovaniya) organized in wartime.