The evolution of Russian federalism and its current fiscal dilemmas: an institutional account

Abstract

In order to make sense of the fiscal component of the emergent federalism in the post-Soviet Russian political system, this article provides an historical-institutional analysis which charts over time the development both of legal frameworks and informal political contexts, thus providing an overview of the changing mix of constraints, resources, and strategic opportunities present to actors occupying various roles within the federal system. Several discrete stages in the evolution of Russian federalism from the late Gorbachev era to the present are identified. According to this analysis, Russia's political system has elements of genuine federalism, but federalization is constrained by specific attributes of the Soviet legacy. Russian federalism is asymmetrical, that is, ethnically defined subunits (the republics) enjoy greater powers than their non-ethnically defined counterparts. This asymmetry may have been a necessary response to the ethnic ambitions of the so- called “autonomous” entities inherited from the Soviet era. At the same time, however, some of the non-ethnic subunits (principally the oblasts, or regions) have demanded similar rights of autonomy, especially with regard to control of natural resources, shared tax revenues, and other economic concerns. Developments since the mid-1990s suggest a modest return of power to the federal center at the expense of the subunits, but the latter still enjoy a degree of independence unheard of during the Soviet period. Meanwhile, there has been a trend toward equalization of economic powers between the republics and oblasts. Still worrisome, however, are the disparities in wealth among the various subunits and the penchant for self-enrichment on the part of leaders of otherwise impoverished regions and republics.