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Regular version of the site

Article

A tale of two crises: Federal transfers and regional economies in Russia in 2009 and 2014-2015

Economic Systems. 2018. Vol. 42(2018). P. 175-185.
Alexeev M., Chernyavskiy A.

We examine transfers from Russia’s federal government to the regions during the two recent
economic crises. We show that while federal transfers in 2009 were large and targeted poorer
regions, the 2014–2015 transfers were much smaller and not targeted. This policy shift was
accompanied by a relatively greater decline in own revenues in the poorer regions and their
worse economic performance overall. As a result, interregional budget expenditure inequality in
Russia was significantly higher in 2014–2015 than it had been for years. This is important because
regional budgets are responsible for a large share of investments, housing, education and
healthcare.