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Changing Tax Effort in Russia’s Regions; the Impact of Re-Centralization

Author

Listed:
  • Judith Thornton

    (University of Washington, USA)

  • Krisztina Nagy

    (Pacific Lutheran University, USA)

  • Pasita Chaijaroen

    (College of William & Mary, USA & Vidyasirimedhi Institute of Science and Technology, Thailand)

Abstract

We use panel data for 1998 – 2012 and system General Methods of Moments (GMM) specification to test for differences in behavior of resource-rich regions and other Russian provinces due to re-centralization of resource royalties from the region to the center. We ask whether joint taxation of the same tax base by both federal and provincial governments led to vertical externalities and possible over-taxation between federal and regional authorities. We explore whether a shift in the collection of resource taxes from the provinces to the center impacted the size and share of regional tax collection. We find that own tax collections of resource-rich regions declined after re-centralization, while strong vertical externalities persisted between federal and provincial taxes due to joint collection of profit taxes and the overlap between regional income taxes and federal value added taxes.

Suggested Citation

  • Judith Thornton & Krisztina Nagy & Pasita Chaijaroen, 2019. "Changing Tax Effort in Russia’s Regions; the Impact of Re-Centralization," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 7(1), pages 62-79.
    • Handle: RePEc:ejn:ejefjr:v:7:y:2019:i:1:p:62-79
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    References listed on IDEAS

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    3. Alexeev, Michael & Mamedov, Arseny, 2017. "Factors determining intra-regional fiscal decentralization in Russia and the US," Russian Journal of Economics, Elsevier, vol. 3(4), pages 425-444.
    4. Robin Boadway & Jean-Francois Tremblay, 2005. "A Theory of Vertical Fiscal Imbalance," Working Papers 2006-04, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    5. Alexeev, Michael & Weber, Shlomo, 2013. "Russian Fiscal Federalism: Impact of Political and Fiscal (De)centralization," CEPR Discussion Papers 9356, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Mohammed Kalloub & Ibrahim Demir & Ahmed Musabeh, 2020. "Trends and Drivers of Tax Effort: International Empirical Evidence," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 8(2), pages 85-94.

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