Agent modeling of the budget federalism incentives

Doklady Bashkirskogo Universiteta. 2019. Volume 4. No. 1. pp. 62-66.

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The design of intergovernmental relations determines the system of fiscal incentives of a federal state. In centralized models, the key role is played by the federal level, and the subnational bureaucracy is directly dependent on the center. In decentralized models, entities have a large set of powers and fiscal autonomy. Independence and a wide range of levers create conditions and incentives for local authorities to develop. The work is devoted to the analysis of intergovernmental relations of traditional federal states on the basis of the agent approach. The theoretical basis of the study is the concept of market-preserving federalism.