Political Effects of Sub-Regional Fiscal Policies in Russia

Abstract

The study offers empirical evidence that the fiscal policy of the regional and local elite can influence the electoral results of the current government. It demonstrates that in determining the budgetary policy the political leaders rely on electoral business cycles. As a rule, there is a tendency towards a decrease in expenditures on socially significant items, that the population may be most sensitive to, between the elections while there is an increase in expenses before the upcoming elections. The implementation of regression analysis on data from 2010 to 2019 showed that each level of the Russian budgetary system can be assigned certain fiscal functions, the combination of which can lead to the growth of electoral support by the population both for the president and the governors, and for the ruling party at federal and regional elections. The authors have established a model of the fiscal functions’ distribution between the authorities from regional and sub-regional levels that can strengthen the loyalty of the electorate. This allows to claim the municipal reforms, the implementation of which started in the 2000 s along with the policy of recentralization, has its positive results for existing political regime.