Central-local budgetary arrangements have undergone numerous changes since the 1960s as the Chinese government in its quest for modernization has sought to balance the needs of central control and local autonomy. During the reform period, the falling tax share of GNP and a commitment to greater decentralization of the planning system led to major changes in the public finance system that have devolved expenditure responsibilities and financial authority to local governments. Fiscal decentralization has been credited with hardening budget constraints for local publicly controlled enterprises and government agencies. New budgetary relations have instilled fiscal discipline, allowing local governments to disburse more expenditures only if they generated more revenues. These reforms have helped unleash the entrepreneurial spirit of local bureaucrats, fuelling the rapid growth of rural industry.
By employing the methodology developed by the OECD the paper assesses the degree of revenue decentralization in Russia in comparison with other post-communist European countries. The paper provides theoretical arguments underpinning fiscal decentralization, analyzes the composition of subnational government revenues, the level of regional and local tax autonomy and types of intergovernmental fiscal transfers. The analysis presents the composition of revenues depending on the degree of subnational and local government control. In comparison with other transition countries fiscal decentralization in Russia is relatively low. It is concluded that Russia's public finance reform has not progressed towards providing greater fiscal autonomy for regional and local governments.
Harry Kitchen, Melville McMillan and Anwar Shah, Local Public Finance and Economics: An International Perspective. Palgrave Macmillan, 2019. 521 pp., ₹8,977.50.
