Fiscal Federalism and Financial Resources for Regional Development - Co-operative and Competitive Models: The International Experience - an Example for Russia?

Bernhard Seidel and Mechthild Schrooten

No 220, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In Western economies, the concrete design of fiscal federalism is determined by the status the federation grants to regionally comparable economic and social conditions, and to what extent this status is anchored in the constitution. If the political and social acceptance of regional differences is high, the significance of regional equalisation is low and vice versa. In the case of great regional differences fiscal equalisation could be overburdened by the task of reducing fiscal strength. Moreover, if the political and social acceptance is lacking, regional policy interventions of the federal level is appropriate to support the regional economic convergence rather than fiscal equalisation. However, in high-performing economies organized as federations, comparably weak institutions such as those in Russia are largely unknown. In this sense, international experience makes it clear that strong and well-designed institutional arrangements between the different governmental levels are an important precondition for a high-performing fiscal system. In other words, to take advantage of the potential efficiency gains offered by fiscal federalism, the vertical co-ordination of revenue and expenditure responsibilities between the different governmental levels should be clarified. Problems of destruction and enforcement should be eliminated and replaced by harmonization and co-operation.

Keywords: Fiscal federalism; Russia; regional policy; fiscal equalisation; tax policy (search for similar items in EconPapers)
JEL-codes: E60 E62 H1 H7 R58 (search for similar items in EconPapers)
Pages: 22 p.
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.38493.de/dp220.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp220

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().