{
  "title": "Fiscal Federalism and Regional Performance",
  "publication": "IMF Working Papers, November 22, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/11/22/fiscal-federalism-and-regional-performance-45430",
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  "summary": "Sound regional policies are essential for balanced and sustained economic growth. The interaction of federal and regional policies with cross-regional structural differences affect human and physical capital formation, the business climate, private investment, market depth, and competition.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Sound regional policies are essential for balanced and sustained economic growth.\n- The interaction of federal and regional policies with cross-regional structural differences affects human and physical capital formation, the business climate, private investment, market depth, and competition.\n- This paper summarizes the main elements of Russia's fiscal federalism, describes the channels through which it operates, and assesses the effectiveness of regional transfers in reducing regional disparities."
    },
    {
      "heading": "Main findings",
      "content": "- Federal transfers to regions contributed to reducing disparities arising from heterogeneous regional tax bases and fiscal revenues.\n- Regions with initially lower per capita income were able to increase human and physical capital at higher rates following transfers.\n- There is little evidence that transfers contributed to increased cross-regional growth synchronization.\n- Federal transfers did not significantly improve regional fiscal sustainability.\n- The lack of convergence in per capita real income across Russian regions in the last 15 years supports the conclusion about limited fiscal sustainability effects."
    },
    {
      "heading": "Channels and mechanisms analyzed",
      "content": "- Interaction of federal and regional policies with structural differences across regions.\n- Effects on human capital formation.\n- Effects on physical capital formation.\n- Effects on the business climate, private investment, market depth, and competition.\n- Role of heterogeneous regional tax bases and fiscal revenues in driving disparities."
    },
    {
      "heading": "Policy implications and interpretations",
      "content": "- Targeted federal transfers can reduce disparities caused by uneven tax bases and fiscal revenues by enabling faster accumulation of human and physical capital in lower-income regions.\n- Transfers alone appear insufficient to achieve cross-regional growth synchronization.\n- Transfers did not materially enhance regional fiscal sustainability over the period analyzed, suggesting complementary reforms may be necessary to foster long-term convergence.\n\n---\n\n Content in this bundle\n\n- Fiscal Federalism and Regional Performance, WP/17/265, November 2017\n  - Fiscal Federalism and Regional Performance, WP/17/265, November 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Federalism and Regional Performance, WP/17/265, November 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/11/22/fiscal-federalism-and-regional-performance-45430"
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    "Authors: Gabriel Di Bella, Oksana Dynnikova, Francesco Grigoli",
    "Published: November 22, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484330166.001",
    "Sound regional policies are essential for balanced and sustained economic growth.",
    "The interaction of federal and regional policies with cross-regional structural differences affects human and physical capital formation, the business climate, private investment, market depth, and competition.",
    "This paper summarizes the main elements of Russia's fiscal federalism, describes the channels through which it operates, and assesses the effectiveness of regional transfers in reducing regional disparities.",
    "Federal transfers to regions contributed to reducing disparities arising from heterogeneous regional tax bases and fiscal revenues.",
    "Regions with initially lower per capita income were able to increase human and physical capital at higher rates following transfers.",
    "There is little evidence that transfers contributed to increased cross-regional growth synchronization.",
    "Federal transfers did not significantly improve regional fiscal sustainability.",
    "The lack of convergence in per capita real income across Russian regions in the last 15 years supports the conclusion about limited fiscal sustainability effects.",
    "Interaction of federal and regional policies with structural differences across regions.",
    "Effects on human capital formation.",
    "Effects on physical capital formation.",
    "Effects on the business climate, private investment, market depth, and competition.",
    "Role of heterogeneous regional tax bases and fiscal revenues in driving disparities.",
    "Targeted federal transfers can reduce disparities caused by uneven tax bases and fiscal revenues by enabling faster accumulation of human and physical capital in lower-income regions.",
    "Transfers alone appear insufficient to achieve cross-regional growth synchronization.",
    "Transfers did not materially enhance regional fiscal sustainability over the period analyzed, suggesting complementary reforms may be necessary to foster long-term convergence.",
    "**Fiscal Federalism and Regional Performance, WP/17/265, November 2017**"
  ],
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