Decentralize but not federalize

Abstract

This chapter discusses the factors, other than the socio-economic ones, involved in the distribution of intergovernmental transfers in Russia in the 1990s, 2000s, and 2010s. Vladimir Popov agrees that political factors played a significant role in the process of redistribution of federal financial support in the 1990s and at the beginning of the 2000s. Before 2005, only one instrument of long-term territorial support existed in Russia, namely federal programs. Russian society did not express an interest in the discussion of intergovernmental finance, nor in the problems of Russian federalism at large. Russian regional policy is clearly oriented at equalizing the budget capacities of economically lagging subnational units with the rest of the country. The special economic zones laid the foundations for forming new points of growth that could accelerate the economic development of both a given region and the whole country. The economic dimension of territorial development has never been on the shortlist for the presidential agenda.