Federal relationships, regional policy, and the problem of deformation of Russia’s economic space

Abstract

The paper considers the relationship of the concepts of federalism and decentralization of authority and resources in modern economy. The main difference between them is that in a federal state, efficient institutions exist for the participation of regions in developing policy at the country level. In economic crisis conditions, substantial changes are observed in the institutional structure of the country; they are related to redistribution of authority between levels and government bodies. The construction of the power vertical in Russia after 2004 led to a reduction in the real authority of federal subjects, a relative reduction in the financial base of regions and local self-government, and degradation of federal institutions. A case study of Russia shows than a relationship exists between the quality of federal institutes and the quality of regional policy. Analysis of recent guidelines devoted to solving Russia’s problems of federalism and regional policy shows that there is a contradiction between diagnosing regional problems and practical solutions in the given area. Under these conditions, decentraliation of resources instead of an increase in the efficiency of regional policy more likely leads to an intensified role in the federal center in decision making.