The Organization of Economic Cooperation and Development (OECD), in its Economic Survey of Russia in 2000, noted that: ‘ambiguity in expenditure assignments has plagued the development of fi scal federalist relations in Russia’.1 In particular, there has been a lack of clarity over those areas, such as education, health and social policy, that come under the joint jurisdiction of the regions and the federal government. As Kurlyandskaya notes:

Prior to the recent reforms that changed the assignment of responsibilities across governments of different levels in the Russian Federation, regional governments were free to determine almost all aspects of their fi scal relations with constituent localities. The ratio of local to regional budget expenditures varied in different regions from 15:85 to 85:15. The lack of clear delimitation of expenditure responsibilities between regional and local gov ernments led to continuous disputes over who – what level of government – was responsible for delivering this or that service and who should provide the funding.2