We find a significant association between governance in Russia’s diverse regions and economic well-being, that is, we find a performance gap in government practices. We identify effective governance in some of the more tangible aspects of policymaking, such as the adoption of effective public health, investment and labor policies. We continue to explore a model and assess data relevant to our search for indicators of human capital and their relevance to economic growth. We also assess in tests in our model the importance of unobserved and unmeasurable managerial attributes of the local government in implementing federal and region level laws and regulations.We extend these findings in a preliminary, and new, closer examination of causal relationships by a case study of one of Russia’s well-off regions, Khanty-Mansiysk autonomous okrug (KhMAO). In it we utilize and extend strategic research on public policy carried out by the Institute of Regional Studies and Urban Planning, where we are associated. From a close examination of budgeting and debt in the fiscal federalist strategy in KhMAO, we show budget management in response to pressures from increased federal required expenditures, post-crisis withdrawal of subsidies, and the roll-out of new debt guidelines. We tentatively ascribe the stability and the relative flexibility of the budget process and low debt in post-crisis current conditions to federalism at its most cooperative: neighboring regional action fostering growth and stability, as well as the input of local administration and other factors.