Russian Regional Resilience: Finance, Cooperation and Resource Abundance (A Case Study of Khanty-Mansiysk)

24 Pages Posted: 23 May 2014

See all articles by Irina Ilyina

Irina Ilyina

Institute for Regional Studies and Urban Planning

Carol Leonard

National Research University Higher School of Economics

Evgenij Plisetskij

National Research University Higher School of Economics

Date Written: May 22, 2014

Abstract

This paper, part of a larger project on governance and growth in Russia, examines regional financial resilience in Russia in the period following the global financial crisis. The level of risk is rising, as government emergency finance is withdrawn and regions face rising debt to cover even operational expenses, but “resource” regions seem securely well off, despite having been most affected by the financial crisis. This paper examines one region, Khanty-Mansiysk autonomous okrug (KhMAO), the largest “donor” to the federal budget, against the background of other mineral resource abundant regions. It traces developments since the dramatic budget reforms (late 1990s through 2005), including centralization of revenues and rationalized program expenditure (Alexeev and Weber 2013). It assesses regional budget and debt management in response to pressures from increased federal required expenditures, post-crisis withdrawal of subsidies, and the roll-out of new debt guidelines. It describes and explains KhMAO’s stability and relative autonomy in these crisis conditions. The key questions are: Why are these “donor” regions, more affected by the crisis than others, also more resilient? Is Russia’s growth core of regions financially stable because of federal intervention? How vulnerable is the resource region to future oil price shocks? Our findings are tentative, since there remain questions about transparency and soft budget constraints (Plekhanov 2006). We show federalism at its most cooperative: among other factors, regional collaborative action fosters flexible budgeting.

Keywords: regional governance, oil-producing regions, fiscal federalism, economy, Russia, federal budget, federal and regional programs, budget reforms, investment strategies

JEL Classification: R580, R510, H700

Suggested Citation

Ilyina, Irina and Leonard, Carol and Plisetskij, Evgenij, Russian Regional Resilience: Finance, Cooperation and Resource Abundance (A Case Study of Khanty-Mansiysk) (May 22, 2014). Higher School of Economics Research Paper No. WP BRP 15/PA/2014, Available at SSRN: https://ssrn.com/abstract=2440617 or http://dx.doi.org/10.2139/ssrn.2440617

Irina Ilyina

Institute for Regional Studies and Urban Planning ( email )

13 Milutinskiy Pereulok
Moscow, 101000
Russia

Carol Leonard

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Evgenij Plisetskij (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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