Federal policy of equalizing regional budget revenues: Areas for improvement

E. N. Timushev ()

Voprosy Ekonomiki, 2025, issue 12

Abstract: The study identifies current issues and presents the areas for improving the federal equalization system in Russia. The effectiveness of equalization transfers determines the possibilities of achieving public policy goals, including national development goals. Long-term trends in interregional differentiation by the level of fiscal capacity of Russian regions have been identified. The low volume of equalizing transfers has been illustrated, taking into account price dynamics and the previous rules for calculating the total volume of transfers. The criteria for the effectiveness of intergovernmental equalization are formulated. The disadvantages of the federal policy have been identified. They are expressed in the violation of each of the four rules: (1) the stability of the methodology; maintaining ranks of the regions; (3) following only objective indicators; (4) priority of equalizing over stimulating. The identified shortcomings not only complicate the equalization, but also make it less transparent and predictable. Therefore, it is too early to speak of an effective federal intergovernmental equalization in Russia. The current policy of equalization is successful in reducing the gap between regions in terms of budget revenues compared to the situation before the equalization. However, further reduction of the gap will require not only an increase in the total amount of transfers, but also a correction of the identified shortcomings while maintaining the advantages achieved. This will improve the effectiveness of intergovernmental regulation and prospects of achieving the goals of public policy.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2025:id:5418

DOI: 10.32609/0042-8736-2025-12-134-153

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