Regional policy in Russia 3. Spatial justice & fiscal federalism

Inequality: what to do (1) A. Population and salaryB. Gross Regional Product (GRP) and Incomes per capita

Equity – efficiency trade-offs Efficiency Equity Р1Р1 Р2Р2

Economic growth and spatial (in)equality

Inequality: what to do (2)

Inequality (3): Kazakhstan

Inequality in Russia: most regions are “middle”

Poverty: Territory and people

Spatial Justice: John Rawls’ (Theory of Justice) approach From: D. Smith. Human Geography: A Welfare Approach. – London, 1977

Budgetary re-distribution: negative transfers

Public goods and free-rider problem Public goodsPrivate goods Competitive-+ Non-exclusive+- Charles M. Tiebout hypothesis: If consumer-voters are fully mobile, the appropriate local governments, whose revenue-expenditure patterns are set, are adopted by the consumer-voters. (“A Pure Theory of Local Expenditures”, 1956)

Federalism and subsidiary principle (1) “Subsidiary principle” is adopted from Catholic Church’s social doctrine Leo XIII – Rerum Novarum (1891) Pius XI – Quadragesimo Anno (1931): “Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them”.

Federalism and subsidiary principle (2) AuthorityFederal (national)Regional, local Public goodsDefenseEducation International relationsPublic health International tradeCommunity facilities (water supply and sewerage, recycling etc.) Transfers (redistribution)Fire prevention Immigration policyParks and recreation Subsidies for enterprisesRegional, local roads Natural resourcesetc Air, railway transportation Federal roads etc

Subsidiary principle in practice 1. Wildlife protection "Чтобы эта сеть не была ликвидирована, эта самая санитарная инспекция придумала разделить зверей и рыб на зверье федерального подчинения и регионального. Так, в региональный список попал карась, а в федеральный - щука. В федеральный список попал суслик, а в региональный - тушканчик. Это пример, который характеризует подход федеральных органов власти" (Борис Грызлов, октябрь 2006) 2. Fire protection ГУ МЧС по Саратовской области опубликовало разъяснение: “Тушение природных пожаров не является законодательно закрепленной функцией МЧС России. Его задачей является содействие органам исполнительной власти субъектов Российской Федерации в ликвидации лесных пожаров”. (“Общественное мнение” (Саратов), 30 июля 2010)

Taxes: federal, regional, local (Russia, 2000-es)

Competence distribution matter: roads in Russia (1)

Roads in Russia (2) A. Tver Region and Novgorod Region B. Vologda Region and Kostroma Region

Budgetary reform in Russian in 2000-es: re-distribution and consolidation

“Monetization” in Russia,

Political effects 1.Political (electoral) business-cycles 2.Loyalty Factor 3.“Pork barrel” effect