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

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  • Plekhanov, A.

Abstract

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.

Suggested Citation

  • Plekhanov, A., 2004. "‘Incentive Aspects of Revenue Sharing: Central and Regional Government in Russia’," Cambridge Working Papers in Economics 0440, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0440
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    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe0440.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    3. 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.
    4. 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.
    5. Maurice Obstfeld & Giovanni Peri, 1998. "Regional non-adjustment and fiscal policy," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 205-259, April.
    6. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1-8.
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    Cited by:

    1. Freinkman, Lev & Plekhanov, Alexander, 2009. "Fiscal Decentralization in Rentier Regions: Evidence from Russia," World Development, Elsevier, vol. 37(2), pages 503-512, February.
    2. Hauner, David, 2008. "Explaining Differences in Public Sector Efficiency: Evidence from Russia's Regions," World Development, Elsevier, vol. 36(10), pages 1745-1765, October.
    3. Alexeev, Michael & Mamedov, Arseny & Fomina, Evgenia & Deryugin, Alexander, 2017. "Influence of the Main Characteristics of Interbudgetary Relations on the Indicators of Economic Development of the Subjects of the Russian Federation," Working Papers 031717, Russian Presidential Academy of National Economy and Public Administration.

    More about this item

    Keywords

    Fiscal federalism; incentives; Russia; regional government;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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