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Fiscal Decentralization in Rentier Regions: Evidence from Russia

  • Freinkman, Lev
  • Plekhanov, Alexander

Summary The paper argues that governments in regions that rely heavily on intergovernmental transfers and natural resource rents face serious distortions in their incentive structure. As a result, such regions tend to have more fiscally centralized governments than the regional characteristics would suggest. Data on Russian regions in the late 1990s--early 2000s support this hypothesis. Advancing intraregional fiscal decentralization in rentier regions could reduce policy distortions, and make the subnational environment more supportive of economic development.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 37 (2009)
Issue (Month): 2 (February)
Pages: 503-512

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Handle: RePEc:eee:wdevel:v:37:y:2009:i:2:p:503-512
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