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‘Incentive Aspects of Revenue Sharing: Central and Regional Government in Russia’

  • Plekhanov, A.

The paper provides an empirical analysis of fiscal incentives for Russian regional governments to foster economic growth and development. It points out several serious problems with previous empirical studies of fiscal incentives into Russian federalism, develops a new theoretical framework for the analysis of revenue-sharing policy between central and regional governments, paying particular attention to the case of non-benevolent authorities, and provides new estimates of incentive effects using an improved econometric methodology and a newly-collected dataset. Contrary to existing studies, incentives for regional governments are estimated to be present, but these incentive effects are considerably weaker in the short run than in the long run.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0440.

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Length: 28
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:cam:camdae:0440
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  1. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 8.
  2. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
  3. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
  4. Maurice Obstfeld & Giovanni Peri, 1998. "Regional non-adjustment and fiscal policy," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 205-259, 04.
  5. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
  6. Litwack, John M., 2002. "Central Control of Regional Budgets: Theory with Applications to Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 51-75, March.
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