Federalism and Local Politics in Russia

Local self-government in Russia 241Furthermore, through changes in the overall taxation system, the share ofthe local authorities’ own (local) taxes as compared to the total amount ofpublic tax revenues has been reduced, while the share of the federal taxes hasincreased. This shift reveals a massive re-centralization of the country’s taxand fiscal system with a pattern of top-down distribution and flow of moneywhich increasingly resembles the ‘fan scheme’ that was characteristic of thecentralist Soviet State model. 66 Thus, for example, the share of the federalrevenues of the entire public revenues grew from 40 per cent in 1998 to 66per cent in 2006, while that of the local authorities fell from 27.6 per cent in1999 to 18.7 per cent in 2002. Correspondingly, the share of governmentgrants in the local government revenues grew from 26.7 per cent to 40.9 percent. 678 Summary: Pendulum of LSG swinging back towardsre-centralization and ‘statesization’Since the collapse of communism in the Soviet Union in 1991 the LSGsystem has experienced a conspicuous sequence of ruptures and shifts.Remarkably radical moves were already made by the 1991 Law on LSG,particularly on two points. First, in abandoning the ‘Stalinist’ concept of the‘unity of the State’ the local authorities were recognized as being endowed, inthe vertical dimension, with self-standing LSG powers. Second, in the localhorizontal dimension a kind of local ‘division of powers’ was acknowledged,with an elected local council (as the local ‘legislative’ decision-making body),and the elected, monocratic ‘head of administration’. Although the conceptof the local ‘head of administration’ fell immediately prey to Yeltsin’s decisionto turn this position into a local appointee in his ‘vertical power’ hierarchy,the basic concept of the ‘duality’ of local council and local executivehas become a permanent feature of the institutionalization of Russia’s LSG.Between 1991 and 1993, under the new legislative scheme (despite itstruncation by the suspension of the direct election of the mayors) Russia’stowns and villages saw an unprecedented upsurge of local politics and LSGactivities. The elections to the local councils which were held nationwide on3 March 1990 were premised, for the first time in the Soviet Union’s history,on a competitive, multi-candidate, quasi-democratic formula. These electionsproved to be a turning point, in that, through them, cohorts of reformmindedpeople (largely reform communists) were elected to the councils andfound themselves confronting ‘old guard’ communists, still entrenched in the‘executive committees’. 68 In short, this period saw an ‘active transformationof life in the localities’, 69 most noticeably in the larger cities, less so in ruralareas. 70 Without much exaggeration one might speak of a political andinstitutional (albeit, alas, short-lived) ‘springtime’ of Russia’s LSG. 71However, the institutional and political development of Russia’s LSG wasprofoundly disrupted when President Yeltsin resorted to violence to resolvehis power struggle with the Khasbulatov-led majority of the Russian