| In the section | Articles |
| Title of the article | Distribution of Financial Resources Within the Budget System of the Russian Federation and Regions’ Economic Growth |
| Pages | 61-74 |
| Author 1 | Artyom Gennadyevich Isaev Candidate Economics, Senior Research Fellow Economic Research Institute FEB RAS 153 Tikhookeanskaya Street, Khabarovsk, Russia, 680042 This email address is being protected from spambots. You need JavaScript enabled to view it. |
| Abstract | This article examines the impact of central government transfers and other sources of regional budget revenues (income tax and property tax) on per capita GRP growth in Russian regions. Analysis is based on official data of 78 regions for the period 2005-2014. The results indicate that transfers, while intending to be an instrument of regional incomes equalization, are negatively associated with economic growth of Russian regions, which contrasts with other estimates of federal transfers’ impact on regional economic growth in Russia. This phenomenon can be explained by high rate of social expenditures in regional governments’ spending. At the same time there is positive relationship between regional budget’s investment and economic growth that indicates significant role of public goods for regional economic development. This study can be considered as confirmation of those conclusions concerning impact of fiscal decentralization on economic growth of Russian regions which claim that current system of intergovernmental relations on sub-national level cannot embody the benefits of fiscal federalism as a principle of effective regional development. Significant factors of regional per capita GRP growth are own sources of region’s budget revenues which reflect costs of doing business. So the rise in property taxes retards economic growth in a region. For the regional authorities it makes sense to operate more flexibly with this tool, especially in periods of economic recession when inflow of corporate income tax to budget tends to decrease. |
| Code | 332.142 |
| DOI | 10.14530/se.2016.4.061-074 |
| Keywords | еconomic growth ♦ fiscal federalism ♦ budget revenues ♦ federal transfers ♦ convergence ♦ public goods ♦ subjects of the Russian Federation |
| Download | SE.2016.4.061-074.Isaev.pdf |
| For citation | Isaev A.G. Distribution of Financial Resources Within the Budget System of the Russian Federation and Regions’ Economic Growth. Prostranstvennaya Ekonomika = Spatial Economics, 2016, no. 4, pp. 61-74. DOI: 10.14530/se.2016.4.061-074. (In Russian). |
| References | 1. Bakhtisin А.R., Bukwald Е.М., Kolchugina А.V. Alignment of Regions in Russia: Illusions of the Program and Reality of the Economy Vestnik Instituta Ekonomiki RAN [Bulletin of the Institute of Economic of RAS], no. 1, 2016, pp. 76–91. (In Russian). 2. Zubarevich N.V. Center and Regions Inter-Budgetary Relations: Economic and Institutional Aspects. Zhurnal Novoy Economicheskoy Assotsiatsii – Journal of the New Economic Association, 2014, no. 3 (23), pp. 158–161. (In Russian). 3. Idrisova V., Freynkman L. Impact of Federal Transfers on Fiscal Behavior of Regional Governments: Scientific Papers. Institute of Economy in Transition. No. 137Р. Moscow: Institute of Economy in Transition, 2010, 100 p. (In Russian). 4. Isaev A.G. Public Investment as a Determinant of Economic Growth of the Russian Regions. Regionalistica – Regionalistics, no. 4, 2014, pp. 61–72. DOI: 10.14530/reg.2014.4. (In Russian). 5. Problems of Inter-Budgetary Relations in Russia. Moscow, 2012, 188 p. (In Russian). 6. Regions of Russia. Socio-Economic Indicators: Statistical Collection. Federal State Statistic Service of Russian Federation. Available at: http://www.gks.ru/wps/wcm/connect/rosstat_main/ rosstat/ru/statistics/publications/catalog/doc_1138623506156 (accessed October 2016). (In Russian). 7. Akai N., Sakata M. Fiscal Decentralization Contributes to Economic Growth: Evidence from State-Level Cross-Section Data for the United States. Journal of Urban Economics, 2002, vol. 52, issue 1, pp. 93–108. DOI: 10.1016/S0094-1190(02)00018-9 8. Caselli F., Esquivel G., Lefort F. Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics. Journal of Economic Growth, 1996, vol. 1, issue 3, pp. 363–389. DOI: 10.1007/BF00141044 9. Davoodi H., Zou H. Fiscal Decentralization and Economic Growth: A Cross-Country Study. Journal of Urban Economics, 1998, vol. 43, issue 2, pp. 244–257. DOI: 10.1006/juec.1997.2042 10. Rodriguez-Pose A., Kroijer A. Fiscal Decentralization and Economic Growth in Central and Eastern Europe. LEQS. Paper No. 12/2009. Available at: (accessed October 2016). 11. Yushkov A. Fiscal Decentralization and Regional Economic Growth: Theory, Empirics, and the Russian Experience. Russian Journal of Economics, 2015, vol. 1, issue 4, pp. 404–418. DOI: 10.1016/j.ruje.2016.02.004 12. Zhang T., Zou H.-F. Fiscal Decentralization, Public Spending, and Economic Growth in China. Journal of Public Economics, 1998, vol. 67, issue 2, pp. 221–240. DOI:10.1016/S0047-2727(97)00057-1. |
| Financing | |
| Date |