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Fiscal Federalism in Russia: Rules versus Electoral Politics

Author

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  • Vladimir Popov

    ([1] New Economic School, Moscow, Russia. [2] EURUS, Carleton University, Ottawa, Canada.)

Abstract

This paper examines the determinants of financial flows between the federal government and regional authorities in Russia. The main question is to what extent intergovernmental transfers correspond to the ‘ideal pattern’ – equalisation of the abilities of the regions to provide public goods – and to what extent, if at all, they reflect the influence of federal–regional political discourse (asymmetrical federalism). The main finding is that actual net transfers since 1994, although quite close to the ‘ideal patterns’, depended also on the results of the parliamentary (1993, 1995, 1999) and presidential (1996, 2000) elections and on the relations of the regions with the federal centre. The more votes cast for pro-central government parties in parliamentary elections and for Yeltsin in the 1996 presidential elections and the lower the tensions with Moscow after the elections, the more favourable was the fiscal balance for the region with the federal centre. The result is very robust when using different measures of fiscal capacity (index of tax potential) and costs of providing public goods (budgetary expenditure adjustment index). Comparative Economic Studies (2004) 46, 515–541. doi:10.1057/palgrave.ces.8100049

Suggested Citation

  • Vladimir Popov, 2004. "Fiscal Federalism in Russia: Rules versus Electoral Politics," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 46(4), pages 515-541, December.
    • Handle: RePEc:pal:compes:v:46:y:2004:i:4:p:515-541
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    Citations

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    Cited by:

    1. Jorge Martinez-Vazquez, 2007. "Asymmetric Federalism in Russia: Cure or Poison?," Chapters, in: Richard M. Bird & Robert D. Ebel (ed.), Fiscal Fragmentation in Decentralized Countries, chapter 8, Edward Elgar Publishing.
    2. Libman, Alexander, 2011. "Words or deeds – what matters? Experience of recentralization in Russian security agencies," MPRA Paper 29197, University Library of Munich, Germany.
    3. Israel Marques II & Eugenia Nazrullaeva & Andrei Yakovlev, 2016. "Substituting Distribution for Growth: The Political Logic of Intergovernmental Transfers in the Russian Federation," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 23-54, March.
    4. Paustyan, Ekaterina, 2021. "Politically motivated intergovernmental transfers in Russia : The case of the 2018 FIFA World Cup," BOFIT Discussion Papers 2/2021, Bank of Finland, Institute for Economies in Transition.
    5. Libman, Alexander, 2010. "Constitutions, regulations, and taxes: Contradictions of different aspects of decentralization," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 395-418, December.
    6. Kvartiuk, Vasyl & Herzfeld, Thomas, 2021. "Redistributive politics in Russia: The political economy of agricultural subsidies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 63(1), pages 1-30.
    7. Libman Alexander & Feld Lars P., 2013. "Strategic Tax Collection and Fiscal Decentralization: The Case of Russia," German Economic Review, De Gruyter, vol. 14(4), pages 449-482, December.
    8. Elena Jarocińska, 2010. "Intergovernmental grants in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(2), pages 405-427, April.
    9. repec:pra:mprapa:57840 is not listed on IDEAS
    10. Popov, Vladimir, 2014. "Puzzles of public opinion: Why Soviet population supports the transition to capitalism since the 1980S," MPRA Paper 60915, University Library of Munich, Germany.
    11. Popov, Vladimir, 2014. "Загадки Общественного Мнения: Почему Советское Население Поддерживает Переход К Капитализму С Конца 80-Х Годов [Puzzles Of Public Opinion: Why Soviet Population Supports The Transition To Capitalis," MPRA Paper 57842, University Library of Munich, Germany.
    12. repec:zbw:bofitp:2021_002 is not listed on IDEAS
    13. Libman, Alexander, 2013. "Natural resources and sub-national economic performance: Does sub-national democracy matter?," Energy Economics, Elsevier, vol. 37(C), pages 82-99.
    14. Libman, Alexander, 2008. "Federalism and regionalism in transition countries: A survey," MPRA Paper 29196, University Library of Munich, Germany.
    15. Libman, Alexander, 2009. "Constitutions, Regulations, and Taxes: Contradictions of Different Aspects of Decentralization," MPRA Paper 15854, University Library of Munich, Germany.
    16. Paustyan, Ekaterina, 2021. "Politically motivated intergovernmental transfers in Russia: The case of the 2018 FIFA World Cup," BOFIT Discussion Papers 2/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    17. Libman Alexander & Schultz André & Graeber Thomas, 2016. "Tax Return as a Political Statement," Review of Law & Economics, De Gruyter, vol. 12(2), pages 377-445, July.
    18. Karen Vartapetov, 2010. "Russia's federal fiscal grants: regional equalisation and growth," Post-Communist Economies, Taylor & Francis Journals, vol. 22(4), pages 471-481.
    19. Mr. David Hauner, 2007. "Benchmarking the Efficiency of Public Expenditure in the Russian Federation," IMF Working Papers 2007/246, International Monetary Fund.
    20. Hauner, David, 2008. "Explaining Differences in Public Sector Efficiency: Evidence from Russia's Regions," World Development, Elsevier, vol. 36(10), pages 1745-1765, October.
    21. Alexander Libman, 2015. "Words or deeds: what matters? On the role of symbolic action in political decentralization," Empirical Economics, Springer, vol. 49(3), pages 801-838, November.
    22. International Monetary Fund, 2007. "Russian Federation: Selected Issues," IMF Staff Country Reports 2007/352, International Monetary Fund.
    23. Lev Freinkman & Konstantin A. Kholodilin & Ulrich Thießen, 2009. "Incentive Effects of Fiscal Equalization: Has Russian Style Improved?," Discussion Papers of DIW Berlin 912, DIW Berlin, German Institute for Economic Research.
    24. Israel Marques & Eugenia Nazrullaeva & Andrei Yakovlev, 2011. "From Competition to Dominance: Political Determinations of Federal Transfers in Russian Federation," HSE Working papers WP BRP 12/EC/2011, National Research University Higher School of Economics.

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