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Abstract
Eller M., Fidrmuc J. and Fungácˇ ová Z. Fiscal policy and regional output volatility: evidence from Russia, Regional Studies. This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. Accounting for endogeneity between output volatility and fiscal developments by using system-generalized method of moments (GMM) estimation techniques, the results indicate that discretionary fiscal policy contributes to output volatility and induces macroeconomic instability at the regional level in Russia. This corroborates previous studies using cross-country data. To reduce business cycle fluctuations, it would be necessary to curtail procyclical fiscal activism at the regional level, e.g. via fiscal rules and sound institutions of fiscal federalism.
Eller M., Fidrmuc J. and Fungácˇ ová Z. 财政政策与区域产出的波动：来自俄罗斯的证据，区域研究。本文研究2000 年至2009年间，俄罗斯各地区财政政策与产出波动之间的关系。本文通过系统广义矩估计方法（GMM）的评估技术，解决了产出波动与财政发展间的内生性问题，并发现相机抉择的财政政策，加剧了俄罗斯区域水平的产出波动性，并降低了宏观经济的稳定性。这一结果与过去利用跨国数据进行的研究结果相一致。要减少经济周期波动， 就必须通过建立财政制度和健全的联邦制财政机构等方法，在区域水平上减少顺周期财政行为。
Eller M., Fidrmuc J. et Fungácˇ ová Z. La politique budgétaire et la volatilité de la production: des résultats provenant de la Russie, Regional Studies. Cet article cherche à examiner le rapport entre la politique budgétaire et la volatilité de la production des régions russes entre l'an 2000 et 2009. Tenant compte de l'endogénéité entre la volatilité de la production et l’évolution budgétaire à partir de la méthode des moments généralisés (GMM) en système, les résultats indiquent que la politique budgétaire discrétionnaire contribue à la volatilité de la production et provoque en Russie de l'instabilité économique sur le plan régional. Cela confirme les résultats des études antérieures qui ont employé des données à l’échelle des pays. Pour réduire les fluctuations des cycles économiques, il serait nécessaire de limiter l'activisme budgétaire procyclique sur le plan régional, p.e. à travers une réglementation fiscale et de solides institutions de fédéralisme budgétaire.
Eller M., Fidrmuc J. und Fungácˇ ová Z. Fiskalpolitik und regionale Outputvolatilität: Empirische Evidenz aus Russland, Regional Studies. Dieser Artikel untersucht den Zusammenhang zwischen Fiskalpolitik und Outputvolatilität in russischen Regionen in der Zeit von 2000 bis 2009. Die Ergebnisse deuten darauf hin, dass diskretionäre Fiskalpolitik Outputvolatilität erhöht und somit zu makroökonomischer Instabilität auf regionaler Ebene in Russland beiträgt, wobei möglicher Endogenität zwischen Outputvolatilität und der Entwicklung öffentlicher Finanzen durch die Verwendung des System-GMM-Schätzers Rechnung getragen wurde. Diese Ergebnisse bestätigen frühere Untersuchungen, welche auf Ländervergleichen basierten. Um Konjunkturzyklusschwankungen zu reduzieren, wäre es somit nötig, prozyklische fiskalische Aktivität auf regionaler Ebene einzuschränken, z.B. durch adäquate Fiskalregeln und eine solide institutionelle Ausgestaltung des Fiskalföderalismus.
Eller M., Fidrmuc J. y Fungácˇ ová Z. Política fiscal y volatilidad de la producción regional: el ejemplo de Rusia, Regional Studies. En este artículo analizamos la relación entre la política fiscal y la volatilidad de la producción en regiones rusas entre 2000 y 2009. Teniendo en cuenta la endogeneidad entre la volatilidad de la producción y los desarrollos fiscales al utilizar las técnicas de estimación del método generalizado de momentos (GMM), los resultados indican que la política fiscal discrecional contribuye a la volatilidad de la producción y provoca inestabilidad macroeconómica en el ámbito regional en Rusia. Esto corrobora los estudios previos donde se usaban datos de varios países. Para reducir las fluctuaciones de los ciclos comerciales, sería necesario limitar el activismo fiscal procíclico en el ámbito regional, p. ej., a través de normas fiscales e instituciones sólidas de federalismo fiscal.
Acknowledgements
The authors are grateful for the valuable comments made by Peter Backé, Yin-Wong Cheung, Angela De Martiis, Martin Feldkircher, Michael Funke, Geoffrey J. D. Hewings, Shuo Huang, Peter Huber, Iikka Korhonen, Israel Marques, Rasmus Pichler, Alexander Plekhanov, James Robinson, Pierre Siklos, Vladimir Sokolov, Laura Solanko, Bin Tan, Sergei Vlasov and Laurent Weill; as well as by the participants at: the Annual Meeting of the Association for Comparative Economic Studies in Chicago, Illinois, USA, January 2012; the 13th International Academic Conference on Economic and Social Development in Moscow, Russia, April 2012; the European Meeting of the Econometric Society (ESEM) in Toulouse, France, August 2014; and internal research seminars at Oesterreichische Nationalbank and Bank of Finland. The opinions expressed in this paper do not necessarily reflect the official viewpoint of the Bank of Finland, Oesterreichische Nationalbank or the Eurosystem.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1. In particular, a procyclical conduct of discretionary fiscal policy is apparently more pronounced in emerging or developing economies than in advanced economies (Ilzetzki and Végh, Citation2008; Kabashi, Citation2014).
2. Regional government size ranges between 15% and 30% of gross regional product (GRP) and accounts on average for about 20% of GRP ().
3. The underlying research materials for this paper can be accessed at: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/pages/dp1313.aspx/.
4. Even though the elections of regional governors were replaced by direct appointments from the centre, many of the sitting governors retained their posts. Of 140 appointments made between 2005 and 2010, only in 64 cases was the governor actually replaced (Reuter and Robertson, Citation2012).
5. Notably, regions with more reform-oriented governors and active privatization policies have enjoyed more robust growth.
6. Specifically, several Caucasus regions affected by military conflicts (Chechnya, Ingushetia, Ossetia and Dagestan) are excluded from the empirical analysis. Similarly, Kalmykia is excluded due to insufficient data quality.
7. In some cases, the data were collected from these original sources and stored in the CEIC Russia Premium Database.
8. Industrial production per capita cannot be computed because it is available only as an index.
9. As average real industrial growth in Russia was relatively low, reaching only about 3%, monthly indices of industrial production are preferred to growth rates. This reflects the fact that the RSD includes the average growth performance in the denominator. Division by numbers close to zero would artificially increase the reported output volatility for regions with low growth.
10. Debrun and Kapoor (Citation2010) distinguish between ‘cyclical fiscal policy', i.e. any systematic response of the cab to the business cycle, and ‘exogenous discretionary fiscal policy', i.e. any response of the cab unrelated to current macroeconomic conditions. The separation of these different dimensions makes sense in theory but is empirically subject to model and parameter uncertainty. Preferably, any change in the cyclically adjusted balance is classified as discretionary fiscal policy, whether due to the business cycle (e.g. a stimulus package) or other factors (e.g. elections).
11. The output gap is defined as the residual in a fixed-effect regression of GRP growth on trend and squared trend.
12. The dummy variable is created based on the information from Rosstat that ranks regions according to the amount of oil/gas they produce. The dummy variable equals 1 if they produce at least some oil/gas. The results remain unchanged for an alternative definition where only the 15 regions with the highest production of oil/gas had a dummy variable equal to 1.
13. The results do not change if the headline CPI is used instead.
14. This mechanism could be less important for regional government size because it is largely due to national regulations.
15. The results of cross-section estimations are available from the authors upon request (see note 3 above).
16. Baltagi (Citation2008) and Roodman (Citation2009) present a detailed discussion of dynamic panel models.
17. The baseline estimation uses the share of deposits in regional GRP as a proxy for financial sector development because households are likely to put savings into local banks while they can apply for loans from banks located in other regions. Guriev and Vakulenko (Citation2012) also show that local investment is often not financed by local savings.
18. The oil price peaked in 2008, having risen from US$23/barrel in 2000 to US$94 in 2008 and US$61 in 2009. On average, oil prices were nearly twice as high in 2008 and 2009 as they were in 2000–07.
19. Indeed, panel unit root tests confirm the stationarity of all analysed variables, although the power of these tests is chronically low for short time spans.
20. The results of the robustness analysis are available from the authors upon request.
21. These regions include Tumen, Sakha (Yakutia), Sakhalin, Tyva, Altay, Magadan, Amur, Kamchatka, Primorskiy krai and Komi (ordered by share of industrial production). Several non-agricultural regions have also GRP shares of industry above 10%, e.g. Moscow.