Federal Tax Arrears in Russia: Liquidity Problems, Federal Redistribution, or Regional Resistance?
AbstractThree hypotheses about the nature of federal tax arrears in Russia in the second half of the 1990s are tested empirically. Tax arrears can be a result of: 1) liquidity problems in firms, 2) redistribute subsidies of the federal government, or 3) regional political resistance to federal tax collectors. Liquidity problems in firms explain a large part of variation in tax arrears. Regional political resistance to federal tax collectors was also an important factor: For a given level of liquidity, federal arrears accumulated faster in regions where governors had larger popular base, regions with better bargaining position vis-a-vis the center, and regions with governors in political opposition to the center. We find that patterns of federal arrears are inconsistent with redistributive politics premise that redistribution favors jurisdictions with “closer races” for the incumbent on the national elections. Variation in authorized tax deferrals, in part, can be explained by federal redistributive politics.
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Bibliographic InfoPaper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0003.
Length: 35 pages
Date of creation: Feb 2004
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Tax arrears; Regional protection; Russia; Transition; Redistributive politics;
Other versions of this item:
- Maria Ponomareva & Ekaterina Zhuravskaya, 2004. "Federal tax arrears in Russia "Liquidity problems, federal redistribution or regional resistance?"," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(3), pages 373-398, 09.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
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