What does this research mean for the field?

Higher financial autonomy in Russian regions is associated with greater tax potential and faster economic growth, but also leads to increased income inequality. Novelty: ClaimNovelty.NOVEL_FINDING. Consensus alignment: ConsensusAlignment.CHALLENGES_CONSENSUS.

What question did this study set out to answer?

The aim is to analyze how financial autonomy and transfer dependence affect regional socio-economic development in Russia.

February 19, 2026

Financial Autonomy of Russian Regions as a Factor of Resource Provision for Strategizing: A Typology of Transfer Dependence

Puntos clave

The aim is to analyze how financial autonomy and transfer dependence affect regional socio-economic development in Russia.
Grouped Russian regions by budgetary dependence on transfers.
Analyzed budgetary and socio-economic indicators from 2018 to 2024.
Compared tax potential and income inequality across regions.
Identified four groups of regions based on their dependence on non-repayable transfers.
A 49.4 percentage point gap in transfer share existed between high and low dependence regions by 2024.
Regions with higher financial autonomy exhibited better growth rates in regional product and household incomes, but also greater income inequality.

Resumen

Financial autonomy is a key factor that determines the resource base for regional socio-economic development strategies. Russian regions differ in terms of socio-economic development: most constituent entities depend on non-repayable transfers from the federal center. In these settings, the analysis and assessment of the institutional factors that affect the system of intergovernmental fiscal redistribution become particularly relevant for regional strategizing. This article describes some patterns in the relationship between regional financial autonomy, the structure of intergovernmental transfers, and socio-economic development indicators. The constituent entities of the Russian Federation were grouped by the level of budgetary dependence on nonrepayable transfers. The analysis of the structure and dynamics of budgetary and socio-economic indicators covered the period from 2018 to 2024. The author also compared the tax potential and income inequality across regions. The final classification featured four groups of regions with different levels of dependence on non-repayable transfers. The study revealed the reproduction of structural polarization: in 2024, the gap in the share of non-repayable transfers between the extreme groups reached 49.4 percentage points. Regions with high financial autonomy demonstrated a reliable tax potential and a higher growth rate of gross regional product and household incomes. However, the same regions showed greater income inequality. Highly subsidized regions tended to depend on equalization transfers, which generated negative incentives for economic development in these territories. In general, the dependence on non-repayable transfers acts as a structural factor that determines the level of regional financial autonomy and limits the resources for long-term development strategies. The results may be used to improve regional development strategies of intergovernmental fiscal regulation mechanisms.

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