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Federal Intergovernmental Transfers and the Level of Intraregional Fiscal Decentralization in Russia

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  • Evgeny N. Timushev

    (Komi scientific center of the Ural branch of the Russian Academy of Sciences, Syktyvkar, 167982, Russian Federation)

Abstract

The article discusses the federal tools to expand the relative (to the regional level) financial capacity of local budgets in Russia’s budgetary system. Local fiscal decentralization is generally viewed as favorable to local and regional economic development. Reversing the trend of diminishing local powers at the regional level enables unique growth-friendly actions inside broader fiscal policy measures. It has been established that the Ministry of Finance has the ability to shape the fiscal incentives of regional peers toward increasing local decentralization The likelihood of regional authorities taking appropriate actions can be increased if the federal intergovernmental policy measures already planned are implemented, specifically, equalization transfers, balancing grants and earmarked transfers (“subsidies”) are expanded, and the mechanisms of their allocation are upgraded. From the methodological perspective, the “share of local budgets in region-wide total collected tax revenues” has been found to be an unreliable indicator of local fiscal decentralization.

Suggested Citation

  • Evgeny N. Timushev, 2019. "Federal Intergovernmental Transfers and the Level of Intraregional Fiscal Decentralization in Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 27-42, December.
    • Handle: RePEc:fru:finjrn:190602:p:27-42
    DOI: 10.31107/2075-1990-2019-6-27-42
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    References listed on IDEAS

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    More about this item

    Keywords

    federal intergovernmental relations; distribution; equalization; fiscal decentralization indicators; federal districts; probit regression;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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