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Fiscal Fragmentation in Decentralized Countries

Subsidiarity, Solidarity and Asymmetry

Edited by Richard M. Bird and Robert D. Ebel

Most countries, developed and developing, are fiscally decentralized with regional and local governments of varying importance. In many of these countries, some of these sub-national governments differ substantially from others in terms of wealth, ethnic, religious, or linguistic composition. This book considers how fiscal arrangements may strengthen or weaken national solidarity and the effectiveness with which public services are provided. In particular, the nation’s ability to cope with changes created by decentralization is explored.
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Chapter 8: Asymmetric Federalism in Russia: Cure or Poison?

Jorge Martinez-Vazquez


Jorge Martinez-Vazquez The Soviet Union disintegrated in 1991 for several fundamental reasons, including the failure of planned socialism to improve people’s standard of living. One less anticipated, but also fundamental, reason for the disintegration of the Soviet state was the diversity and pluralism of the Soviet republics, which included countries as diverse as Estonia, Latvia and Lithuania in the Baltics; republics such as Tajikistan, Kazakhstan and the Kyrgyz Republic in Central Asia; and Armenia, Azerbaijan and Georgia in the Caucasus. To the surprise of many, one of the leading supporters of this separation was the Russian Federation that, until then, had been perceived as the ruling centre of a vast empire put together during many centuries of war by czarist Russia and the Soviets. The birth of the Russian Federation in the agony of the disintegration of the Soviet Union marked the young country from the start with a fear of its own disintegration. The fears were justified: the Russian Federation was formed of 89 very different regions. From the start, several of these regions rushed to declare their sovereignty and independence from the Russian Federation. In many ways, therefore, the new country was subject to centrifugal forces similar to those that had led to the disintegration of the Soviet Union. Nation building, indeed, keeping the nation together, took first priority in the national agenda in the early years of the transition (1992–93). One of the most important tools used in this effort was the design of a new...

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