Federal Officials’ Wages Grow at an Advanced Rate

According to the data of the Rosstat, in the first nine months of 2014 the maximum amounts of wages were registered with the Administration of the President of the Russian Federation where civil servants received on average Rb 216,411 a month which is 13.8% higher than a year ago. They are followed by officials of the Central Office of the Government of the Russian Federation whose average pay amounted to Rb 200,434 (a 8.5% increase within the past year).

Among employees of federal ministries and agencies, the highest pay was registered with employees of the Federal Special Construction Agency (Rb 122,137; a 39.1% increase within the past year), the Department of Presidential Affairs (Rb 117,326; a 33.4% increase) and the Ministry of Emergency Situations (Rb 114,597; a 8.3% increase). In the period under review, minimum wages were registered with officials of the Ministry of Affairs of the North Caucasus (Rb 38,435), the Ministry of Affairs of Crimea (Rb 40,553) and the Federal Archive Agency (Rb 53,227).

So, as seen from the official data in 2013 the average monthly pay of officials exceeded 3 times over the average level of nominal wages and salaries in Russia in general (Rb 32,000).
For a number of reasons, the data published by the Rosstat on wages and salaries of officials does not bring about optimism. As was stated earlier, in terms of the economic theory such a large-scale growth in officials' wages and salaries is counterproductive (in other words, a retarding one) for economic growth. Such an opinion can, certainly, be called in question. They may argue that the work of officials in combination with other types of economic activities is a factor of economic development of the country. It means that that work should be properly rewarded.

However, it is important to emphasize that the stimulus for a speed-up of economic growth rates is efficient work of various economic components and, alas, it cannot be said about the work of officials in Russia. As seen from the analysis, in Russia the administrative reform which was patterned upon the experience of developed countries failed to yield any tangible results. No wonder, because Russia differs from OECD countries both by the standard of development and mentality and, in our view, it is inexpedient to introduce in Russia rules which work in developed countries.

It is worth mentioning that on the basis of the outputs of the review of foreign experience and the statistics it can be stated that in OECD countries which launched administrative reforms as early as 1980s – the main guidelines of those reforms were aimed, among other things, at decentralization, optimization of the number of officials and achievement of higher efficiency of officials through introduction of the pay-per-performance system – such reforms failed to crown with success. So, the expedience of implementation of the administrative reform the way it was carried out in OECD countries is questionable.
There are no doubts that the principal objective of the administrative reform should consist in reduction of the number of officials and optimization of expenditures on civil service, in particular, payment of remuneration to state officials. At the same time, in our view, growth in wages and salaries in that sector is not quite justified, primarily, due to a lack of any measures aimed at adjustment and adaptation of the administrative reform carried out in developed countries to Russian realities. In addition to the above, in a situation of general stagnation of the Russian economy and lack of the prospects of its revival in the near future substantial growth in officials' wages and salaries – which growth is not underpinned by higher efficiency of state officials' work – only aggravates the pessimism of the expert community and people as regards implementation of concrete measures to promote the economic development of Russia.

Мaria Kazakova, PhD (Economics), Head of the Economic Development Department and Deputy Head of the International Department of Budget Stability Research

Yekaterina Pospelova, Senior Researcher