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The purpose of this research is to study the possible impact of program costs associated with the development of the real sector of the regional economy on the fiscal balances of the constituent entities of the Russian Federation based on the wavelet analysis method. To achieve this purpose, we conducted a correlation analysis of the time-frequency dependence between the variables of the empirical model: the shares of program costs, the shares of non-repayable receipts, and the share of business taxes in the revenues of the consolidated budgets of constituent entities of the Russian Federation such as the Republic of Mordovia, the Udmurt Republic, Trans-Baikal Territory, and Kaliningrad Region for the period from 2001 to 2021. The research results indicate a significant impact exerted by the program costs of the regional budgets on the development of the real sector to ensure fiscal balance in the Republic of Mordovia, the Udmurt Republic, and the Trans-Baikal Territory on certain time scales. The novelty of this research lies in demonstrating the wavelet analysis effectiveness applied when conducting correlation analysis in cases where the relationships between the analyzed variables follow different patterns at different time horizons, and precisely wavelet analysis makes it possible to reveal the most significant characteristics of the relationship of variables. Earlier studies based on traditional methods ignored the time-frequency dependence between the variables of the empirical model. The practical significance of the research results lies in the fact that they determine the time scale on which the most effective measures and budgetary policy instruments applied within the framework of program-target mechanisms are provided to ensure fiscal balances in the regions. Doi: 10.28991/ESJ-2023-07-05-05 Full Text: PDF