BOFIT Viikkokatsaus / BOFIT Weekly 2017/08

A fresh World Bank report finds Russia's social security costly and complex. Social spending on federal and regional levels, and via social funds, is the consolidated budget's largest spending category ­– about 35 % of all spending in 2016 (12–13 % of GDP). Of that, about two-thirds consist of pension spending, with the rest going to other social safety spending. Many social benefits are tied to age, domicile or former profession. The average pension is small, so many social programmes are designed to complement pensions.

Despite the federal government's central role in financing social spending, implementation of social policies is dispersed. There is wide variation across regions for the amount and efficacy of programmes. Russia has over 150 social programmes managed by the federal government, and at least 500 programmes by the regions. Programmes often overlap. Only about 15 % of all social spending goes to means-tested programmes that take into account the needs of the recipients. Moreover, most of the support formats are rigid to administer and do not adjust flexibly to the changing circumstances of beneficiaries.