The determinants of budget revenues of Russian regions

M. Yu. Malkina


This paper discusses the determinants of regional budget revenues and evaluates their impact on the level of budget provision of Russian regions. We used the panel data on 80 Russian regions in 2006-2014 embracing average population, GRP disaggregated by main economic activities, tax revenues both collected and allocated at the regional level, intergovernmental aid and total budget revenues of consolidated budgets. We applied the least-squares methods with fixed and random effects to estimate the regressions between the structure of employment in main economic activities and the collected tax revenues in Russian regions. The constructed model allowed us to distinguish activities with positive and negative influence of employment on the general tax level and to determine the elasticity of the collected tax revenue per capita with respect to the shares of employees engaged in various economic activities. Further we applied the weighted least-squares method to estimate the model, demonstrating dependency of the budget revenue per capita in Russian regions on the collected tax revenue per capita, the level of tax absorption and the share of intergovernmental transfers in consolidated regional budgets. The constructed model demonstrated high elasticity of budget provision of Russian regions with respect to the general tax level, and even more with respect to the level of tax absorption. Nevertheless, the inter-budgetary transfers showed a very slight positive impact on the dispersion of the regional budget revenue per capita over the given period. Our findings are applicable to the management of budget revenues at the regional level and to the improvement of the Russian model of fiscal federalism.


region; budget revenue; determinants; economic activities; GRP per capita

Full Text:



Balaev, A., Gurvich, E., Prilepskiy, I., Suslina, A. (2014). Eff ect of Oil Price and Exchange Rate on the Fiscal Revenues. Financial Journal, 1(19), 5–16. (In Russ.)

Balaev, A. (2017). Factor Analysis of the Russian Budget System Revenues. Economic Polycy, 12(3), 8–37. (In Russ.) doi: 10.18288/1994-5124-2017-3-01

Povarova, A. I. (2017). Alarming Prospects of Russian Regional Budgets. Territorial Development Issues, 2(37), 1–10. Retrieved from (In Russ.)

Castro, G. Á., & Camarillo, D. B. R. (2014). Determinants of Tax Revenue in OECD Countries over the Period 2001–2011. Contaduría y Administración, 59(3), 35–59. doi: 10.1016/S0186- 1042(14)71265-3

Breuillé, M.-L., Vigneault, M. (2010). Overlapping Soft Budget Constraints. Journal of Urban Economics, 67(3), 259–269.

Huber, B., Runkel, M. (2008). Interregional Redistribution and Budget Institutions under Asymmetric Information. Journal of Public Economics, 92(12), 2350– 2361. doi: 10.1016/j.jpubeco.2008.01.008

Kappeler, A., Solé-ollé, A., Stephan, A., Välilä, T. (2013). Does Fiscal Decentralization Foster Regional Investment in Productive Infrastructure? European Journal of Political Economy, 31, 15–25. doi: 10.1016/j.ejpoleco.2013.03.003

Yushkov, A. (2015). Fiscal Decentralization and Regional Economic Growth: Th eory, Empirics, and the Russian Experience. Russian Journal of Economics, 1(4), 404–418. doi: 10.1016/j.ruje.2016.02.004

Isaev A. G. (2016). Distribution of Financial Resources within the Budget System of the Russian Federation and Regional Economic Growth. Prostranstvennaya Ekonomika = Spatial Economics, 4, 61–74 (In Russ.). doi: 10.14530/se.2016.4.061-074

Martinez-Vazquez, J., Timofeev, A. (2014). Intra-Regional Equalization and Growth in Russia. Comparative Economic Studies, 56(3), 469–489. doi: 10.1057/ces.2014.7

Belov, A. (2018). Tax Revenues, Public Investments and Economic Growth Rates: Evidence from Russia. Journal of Tax Reform, 4(1), 45–56. doi: 10.15826/jtr.2018.4.1.044

Malkina, M. (2016). Evaluation of the Factors of Russian Regions’ Convergence / Divergence in the Level of Budget Provision Based on the Decomposition of the Th eil – Bernoulli Index. Prostranstvennaya Ekonomika = Spatial Economics, 3, 16–37 (In Russ.) doi: 10.14530/se.2016.3.016-037

Malkina, M. (2017). Decomposition of Spatial Inequality in Budget Provision by Income Sources: Case of Modern Russia. In: Nešleha, J., Plíhal, T., & Urbanovský, K. (Eds). European Financial Systems 2017. Proceedings of the 14th International Scientifi c Conference, Part 2. Brno: Masaryk University, 35–43. Retrieved from

Liu, J., Hu, X., Wu, J. (2017). Fiscal Decentralization, Financial Effi ciency and Upgrading the Industrial Structure: An Empirical Analysis of a Spatial Heterogeneity Model. Journal of Applied Statistics, 44(1), 181–196. doi: 10.1080/02664763.2016.1252733

Paredes, D., Rivera, N. M. (2017). Mineral Taxes and the Local Public Goods Provision in Mining Communities. Resources Policy, 53, 328–339. doi: 10.1016/j.resourpol.2017.07.007

Malkina, M. (2017). Influence of the Industrial Structure of Economy on the Risk Level of Russian Regions’ Tax Systems. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(6), 2025–2035. doi: 10.11118/actaun201765062025


Copyright (c) 2018 M. Yu. Malkina

Сertificate of registration media Эл № ФС77-80764 от 28.04.2021
Online ISSN 2412-0731