Influence of Fiscal and Economic Self-Sufficiency of the Russian Regions on their Relations with the Centre

The authors of this paper are making an effort to analyze the peculiarities of Russian state regional policy. While highlighting the main trends and factors of the regional policy, we investigate the tools used by the federal centre within the framework of its policy in the regions. We also provide a description of the ways of federal influence which seem to be the most relevant, and we emphasize the negative consequences to which they lead. In addition to that we define the budgetary interrelations between the centre and the regions. It is the set of fiscal policy measures that determines financial support of the regional development. Besides we analyze the concept of “fiscal federalism” which is a key principle under which the economic cooperation between the federal centre and the Russian regions is organized. The research hypothesis is that in order to assert its control in economically independent regions the federal centre strives for providing a direct ascendency on the formation of regional elites and through the formation of the gubernatorial cabinet. In other words the center works on the ‘strong’ regions by placing ‘weak’ and accountable elites in their government bodies. Under the circumstances of an authoritarian political regime, regional rulers must accomplish two groups of tasks: to maintain social and economic stability in the region and to maintain the regime itself.In order to test the research hypothesis we conducted an empirical analysis of appointments of Russian regions’ governors in economically independent regions. The criterion for inclusion cases in the sample was the proportion of the "independence " of the regions , i.e. their ability to shape their own budget without the support of the federal government. After analyzing the cases of ten regions in the sample we were able to confirm that the federal center does have a direct impact on the formation of regional elites through appointments of governors. The center demands that these governors should perform the following: to maintain socio-economic stability and to maintain the current political regime. Among the most significant patterns we should allocate that the federal center tries to appoint those officials who have experience in the federal government and do not have much experience in working in a particular region, as well as they make sure that the candidates have no ties with the local elites . This leads to the fact that governors are politically accountable only to the federal government and decision-making process is made according to a course approved by the federal government.