Mechanism of budget balancing: legal analysis

Abstract

The principle of balanced budget is one of the fundamental principles of the budget system as a whole. At the same time, it is well known that budgets are mostly adopted with deficit or surplus, and the state of balance in reality is unattainable. Under such conditions, the government’s actions to equalize the budget imbalance are of particular importance. 

This article is devoted to the mechanism of ensuring budgetary stability and its constituent elements — the methods the government has at its disposal to counteract crisis phenomena. The methods are considered through the prism of existing legal institutions and are divided into direct and indirect by the way of impact on economic indicators. When analyzing the effectiveness of the legal mechanism, in addition to objective factors, the historical experience and mentality of the population are taken into account, which largely predetermine the popularity and effectiveness of certain measures. 

The article substantiates the necessity of competent legal elaboration of economic methods by means of improvement of existing and integration of new legal institutions. The institutions of borrowing, privatization, contingency funds, budget sequestration and budgetary rules are considered in the context of equalization of budgetary imbalance. Attention is paid to the issue of their correlation and priority for optimal functioning of the country’s economy.

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