Journal of the National Research University Higher School of Economics

Fiscal decentralization (FD) is widely regarded as a potent instrument for mitigating interregional economic disparities, yet its impact can be multifaceted, contingent on the unique economic landscapes of various regions. This article delves into the ramifications of FD on the economic disparity among Russian regions. The study reveals that FD tends to be more effective when regional disparities are relatively modest. Additionally, the efficacy of FD is closely linked to the political affiliations of regional leaders. Notably, our findings highlight stark differences in the effects of FD between developing and developed regions. To harness the full potential of FD in the former, a tailored set of policy measures is imperative.