Strengthening the role of public governance approaches to ensure sustainable economic growth

Abstract

The COVID-19 pandemic has formed a fundamentally new environment in both the global and Russian economies. The scale of problems that countries have to deal with significantly enhances the role of the state in the functioning of the economy and requires active government intervention to stabilize the situation and overcome the crisis. The article analyzes the role of state regulation and monetary authorities in the crisis environment in Russian and global economies. Methodologically, the study relies on the theory of institutionalism, Keynesian and neo-Keynesian economics, monetarism and industrialization. Qualitative methods of analysis, as well as retrospective and system-based methods and cross-country comparisons are applied in the research. The authors emphasize that the quality of these interventions is becoming increasingly important. In the Russian Federation, the economic situation is aggravated by the pre-existing problems, such as low business activity. We analyze the measures to support the Russian economy that are aimed, among other things, at the formation of long-term structural changes. Despite the fact that the introduction of the government approaches to counteract the crisis in 2020 will help to mitigate the current acute situation, they will not be able to lay solid foundations for further sustainable economic growth, since system-based mechanisms are still not provided for forming long-term affordable financial resources that are necessary for investment. The paper develops concrete approaches for providing the economy with long-term money, which embrace the formation of the resources on an internal basis amid the interaction of the Central Bank and the Ministry of Finance. We stress the powerful role of mechanisms for government departments’ coordination.