...Evolving Institutional Framework: The Russian Federation's (RF) institutional framework for local and regional governments (LRGs) has a shorter track record of stable development than many of its international peers, and the credit ratings of most Russian subnationals are thus constrained by the evolving nature of the framework. Changing Responsibilities: The system of intergovernmental relations between federal, regional and local governments is still under development. In recent years, tax-sharing arrangements, and transfer and expenditure allocations among the various tiers of government in the country have changed frequently. The comparative (with international peers) instability of this system imposes limitations on LRGs' medium- and long-term budgeting, investment and debt planning. Prudent Fiscal Management: Most LRGs conduct prudent and conservative budget policies, reflected in satisfactory fiscal performance and moderate, but growing debt. Over the last decade, LRGs' budget execution...
