The Fiscal Impact of the COVID-19 Pandemic on Subnational Governments: The Case of Russia

Michael Alexeev and Andrey Yushkov

Public Finance Review, 2022, vol. 50, issue 3, 239-278

Abstract: This paper examines the fiscal consequences of the COVID-19 pandemic for subnational governments. In particular, we study how the pandemic affected the Russian regions in terms of budget revenues, expenditures, and federal transfers. We use a novel dataset and compare various monthly fiscal measures in 2020 prior to and during the pandemic to the corresponding measures in 2019, conditioning on regional actions in response to the pandemic, the health impact of the pandemic, and the potentially relevant regional characteristics. We document that small business tax collections declined the most in response to the pandemic-related restrictions, while unconditional discretionary transfers and health care expenditures rose the most. Also, we find that tax collections are positively associated with population mobility, controlling for the restrictions, suggesting that tax revenues were inversely affected by the degree of compliance with the restrictions. Finally, we outline some policy implications for the design of fiscal federalism and directions for future research.

Keywords: COVID-19; Russian regions; fiscal federalism; regional budgets (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:50:y:2022:i:3:p:239-278

DOI: 10.1177/10911421221097785

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