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Federalism With and Without Political Centralization. China versus Russia

Olivier Blanchard and Andrei Shleifer

Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research

Abstract: In China, local governments have actively contributed to the growth of new firms. In Russia, local governments have typically stood in the way, be it through taxation, regulation, or corruption. There appears to be two main reasons behind the behavior of local governments in Russia. First, capture by old firms, leading local governments to protect them from competition by new entrants. Second, competition for rents by local officials, eliminating incentives for new firms to enter.

Date: 2000
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Journal Article: Federalism With and Without Political Centralization: China Versus Russia (2001) Downloads
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