Fiscal Federalism and Financial Resources for Regional Development - Co-operative and Competitive Models: The International Experience - an Example for Russia?
AbstractIn Western economies, the concrete design of fiscal federalism is determined by the status the federation grants to regionally comparable economic and social conditions, and to what extent this status is anchored in the constitution. If the political and social acceptance of regional differences is high, the significance of regional equalisation is low and vice versa. In the case of great regional differences fiscal equalisation could be overburdened by the task of reducing fiscal strength. Moreover, if the political and social acceptance is lacking, regional policy interventions of the federal level is appropriate to support the regional economic convergence rather than fiscal equalisation. However, in high-performing economies organized as federations, comparably weak institutions such as those in Russia are largely unknown. In this sense, international experience makes it clear that strong and well-designed institutional arrangements between the different governmental levels are an important precondition for a high-performing fiscal system. In other words, to take advantage of the potential efficiency gains offered by fiscal federalism, the vertical co-ordination of revenue and expenditure responsibilities between the different governmental levels should be clarified. Problems of destruction and enforcement should be eliminated and replaced by harmonization and co-operation.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 220.
Length: 22 p.
Date of creation: 2000
Date of revision:
Fiscal federalism; Russia; regional policy; fiscal equalisation; tax policy;
Find related papers by JEL classification:
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H1 - Public Economics - - Structure and Scope of Government
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
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