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Federalism With and Without Political Centralization: China Versus Russia

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Author Info
Olivier Blanchard (International Monetary Fund)
Andrei Shleifer (International Monetary Fund)

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Abstract

In China, local governments have actively contributed to the growth of new firms. In Russia, local governments have typically stood in the way, be it through taxation, regulation, or corruption. We argue that the difference can be traced to lies in the degree of political centralization present in China, but not in Russia. In China the central government has been strong and disciplined enough to induce local governments to favor growth. In Russia, it has not. We agree, but with an important caveat. We believe the experience of Russia indicates that another ingredient is crucial, namely political centralization. Copyright 2002, International Monetary Fund

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Article provided by Palgrave Macmillan Journals in its journal IMF Staff Papers.

Volume (Year): 48 (2001)
Issue (Month): 4 ()
Pages: 8
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Handle: RePEc:pal:imfstp:v:48:y:2001:i:4:p:8

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P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
P50 - Economic Systems - - Comparative Economic Systems - - - General

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