http://www.ewi.info/system/files/reports/Modernizing%20Municipal%20Finance%20of%20the%20Kaliningrad%

2. The main elements of performance-based budgeting paradigm The Government of Russia has made performance-based budgeting (PBB 8 ) a key element of the budget reform. This paradigm is aimed at increasing the efficiency and effectiveness of executive agencies and their subordinated budget institutions.

According to the budget reform, after the introduction of performancebased budgeting at the federal level, its principles should be extended to the regional level and municipalities. However the participation of regions and municipalities in the budget reform is voluntary. Federal authorities encourage regions and municipalities to implement the budget reform but give them considerable freedom in deciding on the depth of reform, its sequence and instruments.

More than 20 regions are participating in the budget reform.

The transition to performance-based budgeting at the federal, regional, and municipal levels would have been impossible without compliance with some minimal requirements 9 : 1. Delimitation of powers, spending obligations and property between different levels of government and administration (federal, regional, and municipal, including different types of municipalities).

2. Treasury-based budget execution.

As a result, PBB includes three main components (processes) 10 , such as planning activities of budget organizations, medium-term fi__________ 8 MTPBB acronym, meaning medium-term performance-based budgeting, is also used quite widely.

9 Naturally, compliance with the Budget Code of the Russian Federation is one of such requirements. Experts disagree whether the introduction of accrual accounting in the public sector (public administration sector) or changes in the budget classification are a necessary condition for a transition to PBB. 10 Specific instruments and mechanisms are used for PBB processes, such as, for example, reports on results and main areas of activity (RRMAA), budget programs (targeted and departmental), efficiency/performance indicator system, registers of spending obligations, quality standards for budget services.

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