Fiscal Federalism and Incentives in a Russian Region

Posted: 27 Jul 2003

See all articles by Michael Alexeev

Michael Alexeev

Indiana University Bloomington - Department of Economics; Russian Presidential Academy of National Economy and Public Administration

Galina Kurlyandskaya

Center for Fiscal Policy

Abstract

Transfers from a higher-level government budget may affect the incentives of lower-level governments to foster their tax base. If transfers offset completely changes in own budgetary revenues, fiscal incentives are destroyed. Using the data from a Russian region, we cannot reject the hypothesis that transfers offset completely changes in municipal revenues, although the transfers are adjusted with a lag. The estimates suggest that this transfers policy is due in part to short time horizons for regional governments and commitment problems. Budgetary constraints of Russia's regions could have also played a role. Such initial conditions distinguish Russia from Poland and China.

Keywords: Fiscal federalism, Interbudgetary transfers, Incentives of local governments

JEL Classification: H3, H7, P2

Suggested Citation

Alexeev, Michael V. and Kurlyandskaya, Galina, Fiscal Federalism and Incentives in a Russian Region. Journal of Comparative Economics, Vol. 31, No. 1, pp. 20-33 March 2003 . Available at SSRN: https://ssrn.com/abstract=424223

Michael V. Alexeev (Contact Author)

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall 105
Bloomington, IN 47405-6620
United States

Russian Presidential Academy of National Economy and Public Administration ( email )

pr. Vernadskogo, 84
Moscow, 119571
Russia

Galina Kurlyandskaya

Center for Fiscal Policy ( email )

Moscow
Russia

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
591
PlumX Metrics