Legislative Provisions and General Trends

Soviet budgetary history exhibits swings both of centralisation and of decentralisation although the latter term is rarely found in Soviet literature as it clashes with the slogan of ‘democratic centralism’. In any case, these are imprecise terms by comparison with a more concrete record. With that qualification: over a long period centralisation was in the ascendant. Successive stages of the process included the withdrawal from lower organs of the power to levy taxes (1920 onwards) and the inclusion of local budgets in the budget. The ‘budget was gradually to include the gross income and expenditure of the whole economy’ (Davies, 1958, p. 35), but by then a monetary economy was ceasing to operate (Davies, pp. 34–5). The New Economic Policy (1921–8) reversed or partially reversed these trends: for instance, in August 1921 it was acknowledged that local revenues could be collected for local use (Davies, p. 56). Various items were hived off. Introduction of a full system of republic budgets followed the adoption of the constitution of the USSR in 1922 (Davies, p. 80). By October 1924 ‘the main outlines of both the republican and the local budgetary systems were established’ (Davies, p. 81). However, statutes in 1926 and especially of 27 May 1927 introduced modifications; in particular, that of 1927 attached to republics the revenues from three main taxes, as well as various non-tax revenues. A new expenditure classification was confirmed on 12 July 1927. In parallel with the shifting of the business year, the start of the budget year was shifted from 1 October to 1 January (commencing in 1931) (Bescherevnykh, 1976, pp. 76, 90–4, 105).