What Determines the Extent of Fiscal Decentralization?: The Russian ParadoxWorld Bank, Europe and Central Asia Region, Poverty Reduction and Economic Management Department, 2005 - Decentralization in government - 40 pages The paper provides an empirical analysis of the determinants of fiscal decentralization within Russian regions in 1994-2001. The conventional view that more decentralized governments are found in regions and countries with higher income, higher ethnolinguistic fractionalization, and higher levels of democracy is not supported by the data. This motivates a more refined analysis of the determinants of decentralization that points to the link between decentralization and the structure of regional government revenue: access to windfall revenues leads to a more centralized governance structure. The degree of decentralization also depends positively on the level of urbanization and regional size and negatively on income and general regional development indicators such as the education level. |
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analysis Arzaghi and Henderson attitude to reforms average capita GRP capita income capita log convergence correlation corruption perception index countries decentralization in Russian degree of decentralization degree of fiscal determinants of decentralization determinants of fiscal Doha Round Ethnic fractionalization ethnolinguistic fractionalization extent of fiscal factors federal transfers fiscal federalism Flewitt flypaper effect Freinkman and Yossifov Gastil index Gini coefficient Goskomstat GRP per capita heterogeneity higher levels Hines and Thaler hypothesis increase index of ethnolinguistic infant mortality infrastructure and development Inter-American Development Bank levels of democracy Moscow municipal government negative number of students panel estimator Panizza percent population PPP adjusted proxied redistributive policies regional budget regional government expenditure regional government revenue regional government spending regional income resource rents richer regions Russian Paradox Russian regions sample September 2005 social transfers Standard errors statistically significant studies subnational subsamples subsistence minimum Transparency International Wallis and Oates windfall revenues World Bank