Assessment of the impact of the social reproduction process on economic development of the region (case study of the Sverdlovsk Oblast)

• Main Authors: Denis Aleksandrovich Tatarkin, Elena Nikolaevna Sidorova
• Format: Article
• Language: English
• Published: Russian Academy of Sciences, Vologda Research Center 2014-09-01
• Series: Economic and Social Changes: Facts, Trends, Forecast
• Subjects: Social reproduction; social impact; multiplier economic effect; system of national accounts; revenue; social budget expenditure; gross regional product
• Online Access: http://esc.vscc.ac.ru/article/555/full?_lang=en
• ISSN: 2307-0331; 2312-9824

When a human person is perceived not only as a key factor in social development, but also as its objective, there appears the understanding that the qualitative shifts in the reproductive process, most valuable for the society, occurs not in the material sphere, but in the sphere associated with the development of a person and satisfaction of his/her needs. This fundamental postulate helps to prioritize the goals of economic development. Economic growth without social reproduction defeats the purpose of economic development, as economic growth, which does not enhance the level and quality of life, contradicts its primary purpose. Financing of social reproduction of the population is not forced diversion of financial resources from the production process, but social investment that improves the quality of life and attracts skilled workforce to the region. The rise in salary of the economically active population has a positive effect on the formation of a profitable part of the budget, which is a prerequisite for its economic and social development on a more innovative base. It is of fundamental importance to identify the optimal ratio of financial resources allocated to social and production spheres. Social development in the Russian Federation is partly caused by the inability to assess financial implications of the increasing social sector. This occurs, in particular, due to the difficulty to measure socio-economic efficiency of investments. The impact on all sectors of production and social spheres is taken into account. The social sphere is embedded in the economic system of the country. Its development, like the development of any other manufacturing industry, directly affects the economy of the country and its regions. The methodology of the system of national accounts (SNA) provides an opportunity for a comprehensive assessment of the impact of social budget expenditures on the regional economy. On the basis of SNA tools the financial maintenance of social processes can be considered from different sides: from the perspective of revenue dynamics and patterns of goods and services consumption, including social; from the perspective of the influence of social processes on the economic development of the region; from the perspective of the efficiency of socially oriented budget expenditures. The authors have studied the effect of social expenditures on GRP of the Sverdlovsk Oblast on the basis of the 2011 data. Budget expenditures include financing of budgetary institutions of the social sphere from federal, regional and local budgets. The research has revealed that in the Sverdlovsk Oblast in 2011 one ruble of social budget expenditures from all sources (federal, regional and municipal) was equal to 65 kopecks of GRP. Thus, the study has clearly showed that budget expenditures on social services have not only a social, but also significant economic impact on the region’s development