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Potential capacity, limits and research areas of intra-regional (local) fiscal decentralization in the federal policy of regional development

Vol. 26, Iss. 1, JANUARY 2020

Received: 29 November 2019

Received in revised form: 13 December 2019

Accepted: 27 December 2019

Available online: 30 January 2020

Subject Heading: FISCAL SYSTEM

JEL Classification: E22, E62, H77

Pages: 196–212

https://doi.org/10.24891/fc.26.1.196

Timushev E.N. Institute of Socio-Economic and Energy Problems of the North, Komi Science Centre, Ural Branch of RAS, Syktyvkar, Komi Republic, Russian Federation
evgeny_timushev@mail.ru

https://orcid.org/0000-0002-5220-3841

Subject The article considers intra-regional (local) fiscal decentralization in the federal policy of regional development.
Objectives The purpose is to define the role and perspective directions of research in intra-regional (local) fiscal decentralization in the federal policy of regional development against the backdrop of the need to boost Russia’s regional economy and reduce inter-regional disparity in socio-economic development.
Methods I review the legal framework and academic literature, employ the system analysis, comparative analysis of positive and negative aspects of the phenomenon of fiscal decentralization, methods of induction and deduction.
Results The paper highlights positive and negative effects and limited potential of fiscal decentralization. It shows the ambiguous role of inter-budget transfers, and demonstrates that the slow growth of regional expenditures within the structure of total public expenditures in the budgetary system of Russia is combined with low fiscal decentralization in terms of expenditures at both the federal and regional level. I emphasize promising directions of research in inter-budget relations, which stem from objective constraints affecting implementation of effective model of fiscal decentralization in Russia.
Conclusions Inter-regional disparity of socio-economic development and persistent dependence on resources drag down the effective quantitative level and potential of fiscal decentralization, and create specific conditions for the policy of intergovernmental fiscal relations.

Keywords: local fiscal decentralization, inter-regional disparity, resource dependence, regional development

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