Non-rigid budget constraints and the diversity of the population in the Russian regions

Abstract

This paper is devoted to the analysis of the interlink between cultural diversity and the regional governments’ budget constraints in Russian regions. The results of the regression analysis of 2000-2014 regional data demonstrate that the relation of non-reciprocal transfers to GRP is correlated with the republican status of the regions and with the cultural distance between a region and the rest of the country. At the same time the relation with regional diversity is negative and only marginally significant. These results suggest that the transfer policy is directed towards taming the separatist tensions rather than towards diminishing the potential of ethnic conflicts within the regions.