The problem of fiscal federalism

Article Abstract:

Russia's economic collapse in Aug 1998 was due to its fiscal policy. Russia had been maintaining a budget deficit amounting to almost 8% of GDP. This deficit was due to overspending rather than undertaxation. Russians pay taxes amounting to 33% of GDP, which is too high for the nation's level of economic development. Federal revenues, however, were small, because regional governments collect high revenues to support questionable subsidies. The International Monetary Fund sought reform on this issue but the State Duma opposed it. The reformers should have supported their policy by resigning when they met this opposition.

Economic policy, Russia, Fiscal policy

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Getting Costa Rica right

Article Abstract:

Costa Rica's political travails are not due to collusion between the two major parties but due to the increasing difficulty of reaching interparty agreements. A constitutional reform was proposed in 2001 that would move the country from a presidential to a semipresidential system, forcing an alignment between the executive and legislative branches that would be strong enough to break the impasse that currently exists between competing political groupings.

Costa Rica, Analysis, Political aspects, Political reform

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