Meeting of the Scientific Council of the Gaidar Institute

On 2 June, regular meeting of the Scientific Council of the Gaidar Institute was held.

The meeting approved principal findings of the Ph.D. thesis in economics by Andrei Polbin, senior researcher of the Center for Macroeconomics and Finance, "Theoretical and Methodological Basis for the Development of Dynamic Stochastic General Equilibrium Model for the Russian Economy."

Irina Starodubrovskaya, director of the centre for Political Economy and Regional Development, made presentation 'Political Economy of Federalism'.


Presentation >>>

In her presentation, Irina Starodubrovskaya focused on the research findings related to the international experience in federalism on the example of Germany, Canada, Spain and China. According to her, federal instruments are to face system of contradictions' challenges which is determined by the diversity of regions.

The system of contradictions can be divided into three parts. First part is related to ensuring rights, liberties and equality of the citizens: contradictions between centralization and decentralization, between solidarity and subsidiarity.

Second part of issues relates to the state of the subjects of federation: contradiction between formal equality and formal inequality. On one side, regions are equal but in real politics the state of regions-donors and regions-recipients is different: they are unequal. Irina Starodubrovskaya gave an example of Germany where regions-donors turned to the Constitutional Court declaring violation of their rights due to an excessive share of redistribution in favour of new lands. This encouraged implementation of a large scale federalism reform.

Third part deals with identity issues: contradiction between territories of national identity and territories with special identity which aspire to a special status. Irina Starodubrovskaya gave an example of incompatible vision of the core of Canadian federalism:

• Agreement between pre-existing sovereign states;
• Agreement of two peoples founders: English-Canadians and French-Canadians;
• Tool of the national integration and ensuring guaranties for equality of citizens.

Canadian federalism is compelled to balance between these two contradictions. That is why federation appears to be a mechanism to achieve balance between national and regional interests, between centralization and decentralization, between symmetry and assymetryin relations between centre and regions. According to her, Canada discovered a good solution of the contradiction issue: implementation of federal programs remains with the subject which decides implement them or not.

Traditions represent additional factors of recognition of regional features into account as well as conscious change of the structure of regions in order to efficiently pursue federal policy. Instruments for registering regional features are: recognition of regions' interests in pursuing federal policy; balance between centralization and decentralization; asymmetry of regulation and regional policy.

Natalia Zuborevich, Professor of the geography department of the Moscow State University, director of the regional programme of the Independent institute for social policy, and Emil Markvart, president of the European Club of experts local self-rule, Professor of the High school of public administration of RANEPA, were co-speakers.


In her presentation, Natalia Zuborevich characterized Russia as super centralized state with decorative federalist institutions. According to her, oil rent negatively tells on the architecture of the Russian federalism. Herewith she delineated two important factors which affect both regional development and construction of normal federalism. "First, this huge oil rent diminishing in size but as an institutional factor will stay for long, that's why we will be forced to redistribute. Second, Status rent of Moscow represses development of other large cities which require institutional reforms,"- noted Zuborevich. According to her, building of normal federalism is impeded by geopolitical priorities: larger redistribution in favour of cross-border territories. For example, North Caucasus (4% of Russia's population) attracts 10% of total transfers, Far East (4.5% of Russia's population) – 12% of total transfers. "Clear geopolitics which is incompatible with a turn to any type of federalism,"- underlined the expert.

"I think that a current set of traps will not let us to turn to managed decentralization and real federalism because political rule does not need decentralization: power is redistribution of the oil rent. Population is also accustomed to receive large redistributed oil rent,"- concluded Zuborevich.

That said, the expert completely agreed with centralization of the resource rent. "It's a different matter that it is redistributed extremely nontransparently, extremely badly affecting the behaviour of regional elites,"- noted she.

As a recipe for the fight against super centralization, Zubarevich proposed easing with gradual limitation of the federal elite, building of horizontal links between regions which is paramount for the coordination of interests

Video recording of the meeting