ABSTRACT
This chapter focuses on the role played by the central government in allocating resources to Russia’s regions—the oblasts, republics, and krays—both before and after 1991. It analyses the success/failure of the pre-1991 highly centralized allocation of resources in meeting one of the state’s major goals and one of its strongest centripetal forces—reduction of social and economic inequality among Soviet regions—and considers the impact of the dissolution of the Soviet state on fiscal relations between Moscow and its regions within a new Russia. The flexibility of the Soviet tax system was both accommodating to, the rather capricious nature of fiscal relations, especially before 1991. Reform of the state’s fiscal relations has been slower than all the legal developments might indicate, and the Soviet system of ad hoc negotiations between the center and individual regions is largely still in place. Russia’s transition from its Soviet past to what is hoped to be a stable and democratic future is complex and multidimensional.
