Liberalization policies of transition have led to the mass reduction of enterprise subsidization which prevailed in socialist economies. However, in some sectors of the economy, subsidies associated with price controls remain due to "social" and "political" factors. Moreover in multi-tier...

Based on unique data set on Russian city budgets, this paper shows that revenue sharing between regional and local governments provides local governments with no incentive to increase tax base or provide public goods. Any change in local government’s own revenues is almost entirely offset by...