Debt burden, local Fiscal Decentralization and Fiscal Incentives of Regional Authorities
https://doi.org/10.26794/2587-5671-2020-24-1-58-75
Abstract
The author considers fiscal incentives of regional authorities in the system of federal intergovernmental relations. The aim of the study is to determine how the debt burden of Russian regions affects regional fiscal policy in the context of federal co-financing of expenditure obligations. The work employed the methods of grouping, one-dimensional cluster analysis, correlation analysis, and regression by generalized method of moments (system-GMM). The study found that the increase in the regional debt burden relates to a decrease in the level of local fiscal decentralization. Intensive debt financing of regional expenditures in 2013–2015 also reduces the willingness to regionally co-finance federal priorities. The author concludes that high debt burden reduces the fiscal incentives of regional authorities to co-finance federal initiatives and creates the risk of underfunding of national projects.
About the Author
E. N. Timushev
Institute of Socio-Economic and Energy Problems of the North, Federal Research Center “Komi Scientific Center”, Ural Branch of the Russian Academy of Sciences
Russian Federation
Evgenii N. Timushev — Junior Researcher
Russian Federation
Evgenii N. Timushev — Junior Researcher
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For citations:
Timushev E.N. Debt burden, local Fiscal Decentralization and Fiscal Incentives of Regional Authorities. Finance: Theory and Practice. 2020;24(1):58-75. https://doi.org/10.26794/2587-5671-2020-24-1-58-75
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