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The Fiscal Impact of the COVID-19 Pandemic on Subnational Governments: The Case of Russia

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  • Michael Alexeev
  • Andrey Yushkov

Abstract

This paper examines the fiscal consequences of the COVID-19 pandemic for subnational governments. In particular, we study how the pandemic affected the Russian regions in terms of budget revenues, expenditures, and federal transfers. We use a novel dataset and compare various monthly fiscal measures in 2020 prior to and during the pandemic to the corresponding measures in 2019, conditioning on regional actions in response to the pandemic, the health impact of the pandemic, and the potentially relevant regional characteristics. We document that small business tax collections declined the most in response to the pandemic-related restrictions, while unconditional discretionary transfers and health care expenditures rose the most. Also, we find that tax collections are positively associated with population mobility, controlling for the restrictions, suggesting that tax revenues were inversely affected by the degree of compliance with the restrictions. Finally, we outline some policy implications for the design of fiscal federalism and directions for future research.

Suggested Citation

  • Michael Alexeev & Andrey Yushkov, 2022. "The Fiscal Impact of the COVID-19 Pandemic on Subnational Governments: The Case of Russia," Public Finance Review, , vol. 50(3), pages 239-278, May.
    • Handle: RePEc:sae:pubfin:v:50:y:2022:i:3:p:239-278
    DOI: 10.1177/10911421221097785
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    References listed on IDEAS

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    1. Mariely López-Santana & Philip Rocco, 2021. "Fiscal Federalism and Economic Crises in the United States: Lessons from the COVID-19 Pandemic and Great Recession," Publius: The Journal of Federalism, CSF Associates Inc., vol. 51(3), pages 365-395.
    2. Alexander Libman & Michael Rochlitz, 2019. "Federalism in China and Russia," Books, Edward Elgar Publishing, number 18496.
    3. Baranov, Alexey & Malkov, Egor & Polishchuk, Leonid & Rochlitz, Michael & Syunyaev, Georgiy, 2015. "How (not) to measure Russian regional institutions," Russian Journal of Economics, Elsevier, vol. 1(2), pages 154-181.
    4. Migara O. De Silva & Galina Kurlyandskaya & Elena Andreeva & Natalia Golovanova, 2009. "Intergovernmental Reforms in the Russian Federation : One Step Forward, Two Steps Back?," World Bank Publications - Books, The World Bank Group, number 2668, April.
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