Subordinating Federal Transfers: Strategic Interactions between Regional and Federal Authorities in Russia

Subnational politics are often studied as a dependent, sporadic, and unimportant phenomenon. However, subnational governments can be considered as actors even in strongly centralized states. In certain conditions, subnational governments can influence the decisions of the central authorities, thus changing the nature of intergovernmental relations. The master thesis analyzes how Russian regions can strategically adjust policies to receive the largest share of intergovernmental transfers and grants. The master thesis investigates intergovernmental relations in the period between 2013 2018 and examines politically sensitive intergovernmental transfers. The relations of regional and federal authorities are presented as a strategic signaling game. The signaling strategies of regional authorities can be adjustments of fiscal, electoral policies and lobbying. Regression and qualitative comparative analysis were used to test this model. According to the results of empirical analysis, subsidies are sensitive to an increase in spending on social policy, an increase in the results of “United Russia” in regional elections. Other intergovernmental transfers turned out to be more sensitive to a reduction in the regions' own revenues and spending on social policy. The President's visits to the regions better explained the greatest changes in both types of transfers. Given a high administrative and lobbying capacity, the region could claim a greater inflow of transfers. Regions with low unemployment received large amounts of other intergovernmental transfers, while regions with higher rates of unemployment received more subsidies.