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‘Incentive Aspects of Revenue Sharing: Central and Regional Government in Russia’

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  • Plekhanov, A.

Abstract

The paper provides an empirical analysis of fiscal incentives for Russian regional governments to foster economic growth and development. It points out several serious problems with previous empirical studies of fiscal incentives into Russian federalism, develops a new theoretical framework for the analysis of revenue-sharing policy between central and regional governments, paying particular attention to the case of non-benevolent authorities, and provides new estimates of incentive effects using an improved econometric methodology and a newly-collected dataset. Contrary to existing studies, incentives for regional governments are estimated to be present, but these incentive effects are considerably weaker in the short run than in the long run.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0440.pdf
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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0440.

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Length: 28
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:cam:camdae:0440

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Web page: http://www.econ.cam.ac.uk/index.htm

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Keywords: Fiscal federalism; incentives; Russia; regional government;

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References

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  1. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
  2. Maurice Obstfeld & Giovanni Peri, 1998. "Regional non-adjustment and fiscal policy," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 13(26), pages 205-259, 04.
  3. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, Elsevier, vol. 68(1), pages 79-113, July.
  4. Jeremy Edwards & Michael Keen, 1994. "Tax competition and Leviathon," IFS Working Papers, Institute for Fiscal Studies W94/07, Institute for Fiscal Studies.
  5. Olivier Blanchard & Andrei Shleifer, 2000. "Federalism with and without Political Centralization: China versus Russia," NBER Working Papers 7616, National Bureau of Economic Research, Inc.
  6. Litwack, John M., 2002. "Central Control of Regional Budgets: Theory with Applications to Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 51-75, March.
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Cited by:
  1. Hauner, David, 2008. "Explaining Differences in Public Sector Efficiency: Evidence from Russia's Regions," World Development, Elsevier, Elsevier, vol. 36(10), pages 1745-1765, October.
  2. Freinkman, Lev & Plekhanov, Alexander, 2009. "Fiscal Decentralization in Rentier Regions: Evidence from Russia," World Development, Elsevier, Elsevier, vol. 37(2), pages 503-512, February.

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