Koidze, V: Fiscal Federalism under Putin

While fiscal federalism in Yeltsin s Russia bore an apparent political character, Putin s accession to power in 2000 was associated with normalization of fiscal relations, with intergovernmental transfers aimed at bridging the gap between the rich and poor regions. This paper carries out an empirical investigation of Russian fiscal federalism system that emerged under Putin and attempts to identify specific factors that allowed given regions to augment their fiscal allocation. By limiting the study to 2001-2003, a time period marked by a pronounced consolidation of power in the hands of central government, the paper additionally attempts to follow the evolution of fiscal relations in Putin s Russia. The results indicate that Putin s centralization drive succeeds in depoliticizing fiscal relations in Russia. Nevertheless, on the eve of the 2003 parliamentary and the 2004 presidential elections, federal government selectively used the instruments of fiscal federalism to discipline opponents.