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Making Decentralization Work: The Case of Russia, Ukraine, and Kazakhstan



Russia, Ukraine, and Kazakhstan have all carried-out comprehensive reforms of their inter-governmental fiscal systems in the decade since the inception of transition; and all three countries are in the process of considering or implementing far-reaching “second-generation” reforms in this area. In retrospect, the combination of efforts aimed at consolidating macroeconomic stabilization during the early years of the transition, together with the fundamental structural changes in the economy, in some cases strong centrifugal forces, and political and ethnic conflicts, created an extremely complex setting for fiscal decentralization. This goes a long way in explaining why the fiscal decentralization process in the three countries has been rapid, haphazard and largely non-transparent, with the emerging system of federalism having important implications for budgetary developments. The objectives of this paper are to discuss key aspects of the ongoing decentralization process in three important transition economies, Russia, Ukraine, and Kazakhstan; to identify areas where the present systems have clear adverse impacts on efficiency and—potentially—macroeconomic performance; and to offer a roadmap for future reform.

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  • Era Dabla-Norris & Jorge Martinez-Vazquez & John Norregaard, 2000. "Making Decentralization Work: The Case of Russia, Ukraine, and Kazakhstan," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0009, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper0009

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    Cited by:

    1. James Alm & Jorge Martinez-Vazquez, 2002. "On the Use of Budgetary Norms as a Tool for Fiscal Management," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0215, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Libman, Alexander, 2008. "Federalism and regionalism in transition countries: A survey," MPRA Paper 29196, University Library of Munich, Germany.
    3. Jack Diamond, 2002. "Budget System Reform in Transitional Economies; The Experience of Russia," IMF Working Papers 02/22, International Monetary Fund.
    4. Libman, Alexander, 2008. "Informal regionalism in Central Asia: subnational and international levels," MPRA Paper 26417, University Library of Munich, Germany.
    5. Boris Najman & Richard Pomfret & Gael Raballand & Patricia Sourdin, 2005. "How are Oil Revenues redistributed in an Oil Economy? The case of Kazakhstan," Development and Comp Systems 0512012, EconWPA.
    6. Neyapti, Bilin, 2010. "Fiscal decentralization and deficits: International evidence," European Journal of Political Economy, Elsevier, vol. 26(2), pages 155-166, June.
    7. Trien NGUYEN & Randall M. WIGLE, "undated". "The Skill Dimension of Labour Market Impacts of External Price Shocks: Numerical Calculations From a Canadian Regional Trade Model," EcoMod2009 21500071, EcoMod.

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    Decentralization; Russia; Ukraine; Kazakhstan;


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