IDEAS home Printed from https://ideas.repec.org/a/pal/compes/v58y2016i4d10.1057_s41294-016-0010-4.html
   My bibliography  Save this article

Fiscal Incentives in Federations: Russia and the US Compared

Author

Listed:
  • Michael Alexeev

    () (Indiana University
    The Russian Academy of National Economy and Public Administration)

Abstract

I compare fiscal incentives in Russia and the US according to the conventional measures employed in the relevant literature. Although Russia is more fiscally centralized as measured by shares of budget expenditures and revenues, measures of fiscal incentives at the margin are largely similar in the US and Russia both at the regional and municipal levels. These results are contrary to the estimates obtained for Russia in the earlier literature. It appears that fiscal federalism reforms undertaken in Russia throughout the 2000s improved fiscal incentives of subnational governments. However, these results should be treated with great caution as fiscal incentive measures employed in this paper and in the literature at large are far from perfect. This might provide an explanation for the result that intraregional fiscal incentives do not have a significant effect on economic growth.

Suggested Citation

  • Michael Alexeev, 2016. "Fiscal Incentives in Federations: Russia and the US Compared," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(4), pages 485-506, December.
  • Handle: RePEc:pal:compes:v:58:y:2016:i:4:d:10.1057_s41294-016-0010-4
    DOI: 10.1057/s41294-016-0010-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41294-016-0010-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    2. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    3. Steven Yamarik, 2013. "State-Level Capital And Investment: Updates And Implications," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 62-72, January.
    4. Dmitry Shishkin, 2013. "Fiscal Incentives and Shared Revenue Sources with Differentiated Sharing Rates," Public Finance Review, , vol. 41(4), pages 473-488, July.
    5. Zhuravskaya, Ekaterina V., 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Journal of Public Economics, Elsevier, vol. 76(3), pages 337-368, June.
    6. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    7. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    8. Xie, Danyang & Zou, Heng-fu & Davoodi, Hamid, 1999. "Fiscal Decentralization and Economic Growth in the United States," Journal of Urban Economics, Elsevier, vol. 45(2), pages 228-239, March.
    9. Davoodi, Hamid & Zou, Heng-fu, 1998. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," Journal of Urban Economics, Elsevier, vol. 43(2), pages 244-257, March.
    10. Ulrich Thießen, 2003. "Fiscal Decentralisation and Economic Growth in High-Income OECD Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 237-274, September.
    11. Baretti, Christian & Huber, Bernd & Lichtblau, Karl, 2002. "A Tax on Tax Revenue: The Incentive Effects of Equalizing Transfers: Evidence from Germany," Munich Reprints in Economics 20129, University of Munich, Department of Economics.
    12. Zhang, Tao & Zou, Heng-fu, 1998. "Fiscal decentralization, public spending, and economic growth in China," Journal of Public Economics, Elsevier, vol. 67(2), pages 221-240, February.
    13. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    14. Christian Baretti & Bernd Huber & Karl Lichtblau, 2002. "A Tax on Tax Revenue: The Incentive Effects of Equalizing Transfers: Evidence from Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(6), pages 631-649, November.
    15. repec:eee:rujoec:v:1:y:2015:i:4:p:404-418 is not listed on IDEAS
    16. Alexeev, Michael & Kurlyandskaya, Galina, 2003. "Fiscal federalism and incentives in a Russian region," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 20-33, March.
    17. Weingast, Barry R., 2009. "Second generation fiscal federalism: The implications of fiscal incentives," Journal of Urban Economics, Elsevier, vol. 65(3), pages 279-293, May.
    18. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:ecosys:v:42:y:2018:i:2:p:175-185 is not listed on IDEAS

    More about this item

    Keywords

    fiscal federalism; fiscal decentralization; Russian regions; the US states;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:compes:v:58:y:2016:i:4:d:10.1057_s41294-016-0010-4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.palgrave-journals.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.