Institutional Factors Shaping the Financial Model for Balanced Social Development in the Regions of Russia’s Central Federal Okrug

Abstract

Ensuring balanced regional social development is challenging without a clearly defined framework for social financing reform, given the complexity of the social sphere and resource constraints. This study aims to identify key factors shaping the transformation of the institutional environment within the financial model for balanced regional social development. An analysis of social development indicators and financial support in Russia’s Central Federal Okrug reveals a key issue: the institutional framework for social financing remains weak. This is reflected in the gap between government program targets and actual results, the limited use of public-private partnerships, and the low engagement of private businesses in addressing social challenges. Findings indicate that a key issue is the low share of investment financing in the social sector (approximately 8 %). Econometric analysis reveals that the most significant factors influencing the degree of balanced social development include budgetary and investment financing levels in housing and utilities, education, and healthcare. A cluster analysis, considering both the achieved social outcomes and the complexity of financial instruments employed, demonstrates variation in the effectiveness and balance of financial models across the Central Federal Okrug. The most effective and well-balanced financial mechanisms are found in Belgorod, Bryansk, Voronezh, and Ivanovo Oblasts, while the least effective and poorly balanced models are observed in Vladimir, Kaluga, Tambov, and Tula Oblasts. For each regional cluster group, tailored social development strategies should be devised, offering a practical framework for authorities to shape social policy.