In-depth analysis of international and Russia’s experiences with implementing fiscal rules is presented. Theoretical and empirical evidences are suggested in favor of retaining the present fiscal rules with some modifications aimed at ensuring: a) a relatively stable level of federal budget expenditure with guaranteed full execution of all commitments; b) countercyclical fiscal policy, based on flexibleand proper reaction to revenue changes; and c) robustness of fiscal rules to internal and external shocks. The main new features suggested include modified calculation of the oil base price, different measurement of cyclical fiscal revenues, lower size of structural fiscal balance, and thorough specification of sources for each item of the balance. The modified rules envisage increased flexibility by relaxing to a pre-set extent and for a pre-set time spending limits in response to extreme shocks. The suggested version of fiscal rules has been tested by application to historical data for 2005-2015, and macro projections for 2015-2025.
