Informal taxes for the provision of public goods in Russian regions

G. E. Besstremyannaya ()

Voprosy Ekonomiki, 2019, issue 1

Abstract: The article studies the example of informal taxes in Russia — a phenomenon when citizens provide voluntary payments for financing local public goods. This so-called “self-taxation” has attracted attention in 2017 upon the adoption of the changes to the local government law, which simplified the procedure for local referendum. The article outlines institutional reasons for the emergence of this mechanism and its risks for Russia and other countries. The empirical analysis exploits the data by the Russian Statistical Agency and the Russian Treasury. Our results reveal a positive relationship between the coefficient of regional cofinancing of municipal projects and the growth in the share of voluntary payments in the non-tax revenues of local budgets. Therefore, self-taxation by citizens may be viewed as a signalling tool for enhancing the quality of local public goods.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2019:id:2138

DOI: 10.32609/0042-8736-2019-1-124-134

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