IDEAS home Printed from
   My bibliography  Save this article

Regional Equalization: Are there Incentives to Development?


  • Deryugin, Alexander N.

    () (Laboratory for Fiscal Policy Studies of the Russian Presidential Academy of National Economy and Public Administration)


The work aims to assess how the current methodology of distribution of equalization transfers between Russian regions preserves incentives for the development of regional economies. To answer this question the term “stimulus” is clarified and proposed indicator which allows to judge not only about the presence or absence of an incentives to develop the regional economy, but also allows to quantify its assessment. This indicator is a degree of substitution of increase of tax and non-tax revenues by reduction of equalization grants, which shows how the value of equalization transfers changes with different tax capacity of the region. The hypothesis of the presence of a sufficient amount of incentives, which, at first glance, contradicts to popular belief about its absence, is based on the list of elements and features of the existing methodology of distribution of equalization transfers between Russian regions, which contribute to the preservation of such incentives. This hypothesis is confirmed by the results of calculations. Based on calculations of the effect of changes in tax capacity of regions on the value of these transfers for the period 2006–2015 it is shown that for the most of regions the level of this compensation is less than half, which means there are significant incentives for regions to develop their economy and revenue base budget. This stimulating effect was different for the regions with the original level of fiscal capacity before to the distribution of equalization grants below or above 0.6: for the latest it is significantly higher. The paper also considers different factors connected with the increase in revenue capacity negatively affecting the net financial effect on the budget of the region.

Suggested Citation

  • Deryugin, Alexander N., 2016. "Regional Equalization: Are there Incentives to Development?," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 170-191, December.
  • Handle: RePEc:rnp:ecopol:ep1668

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. V. Mau., 2015. "Russia’s Social and Economic Policy in 2014: Finding New Frontiers," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
    2. B. Lapidus & D. Macheret., 2011. "Macroeconomic Aspect of the Evolution of Railway Transport," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    Full references (including those not matched with items on IDEAS)

    More about this item


    equalization transfers; fiscal capacity; tax capacity; incentives for regional development;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism


    Access and download statistics


    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:rnp:ecopol:ep1668. 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: (RANEPA maintainer). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.