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Quantitative analysis of the regional protection in Russia

Evgenia Kolomak

Sažetak

This paper gives one possible explanation why the regional authorities in Russia intervene in local markets combining subsidizing and tax exemptions.
Theoretical framework of the analysis is modified model proposed by G.Grossman and E.Helpman. The authors consider lobbing effect on the international trade protection policy, and focus of the analysis is equilibrium prices resulted from export and import subsidies. Our problem is slightly different; firstly, regional governments can not use export and import tariffs and subsidies, however they can provide input, output subsidies and tax exemptions, secondly, regional governments are more restricted financially and problem of the financial acceptability of the protection policy needs introduction of regional budget constraint into the model, and, finally, we are interested not in equilibrium prices but in equilibrium combinations of different tools of the protection policy.
Theoretical features of the equilibrium regional protection policy are tested empirically for the Russian regions. The estimations have shown that the regional protection is provided because of political pressure of lobbing groups representing interests of the local industrial sectors. The social factors are not in the focus of the policy-maker’s concern and are not significant when the authorities make decision about size of budget resources directed for the purpose of the local producers’ protection.

Ključne riječi

Russia; regional development; taxes

Hrčak ID:

6672

URI

https://hrcak.srce.hr/6672

Datum izdavanja:

1.7.2004.

Posjeta: 995 *