IMF Working Papers describe research in progress by the author(s) and are published to elicit
comments and to encourage debate. The views expressed in IMF Working Papers are those of the
author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
IMF Working Papers describe research in progress by the author(s) and are published to elicit
comments and to encourage debate. The views expressed in IMF Working Papers are those of the
author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
In this paper we examine economic disparities across regions in Russia and offer a theoretical treatment of various transfer rules between different regions. We analyze the principle of partial equalization, which implies that the more depressed regions should be subsidized by the more advantaged regions, but, the burden on more prosperous regions should not be excessive. Although, contrary to the partial equalization principle, the gaps between the richer and poorer regions have widened since the transition, there are some signs that this trend could be reversed.