Investment Attractiveness Rating of Russian Regions, 2001-2002

This may sound strange, but governors are responsible for economic and investment growth in Russia. They are furthermore directly-not indirectly-responsible.

Usually no one mentions the legal aspect of this matter. Article 114 of the Constitution of the Russian Federation, stating the functions of the federal government, mentions policy—budgetary, social, environmental, and even demographic policy—but says not a word about the economy or investment. The task of developing this policy is also not part of the president’s duties or those of the Federal Assembly. That is, unless the president, in accordance with the same Article 114, were to issue a decree forcing the government to develop and implement investment policy. However, there has been no sign of a decree like this. Thus, in general there are really no grounds to accuse federal authorities of pursuing exclusively fiscal goals. The Constitution does not charge regional authorities directly with taking care of the economy. However, Article 73 of the Constitution states that "within the confines of the jurisdiction of the Russian Federation and the authority of the Russian Federation over objects under the joint jurisdiction of the Russian Federation and Russian Federation subjects, the Russian Federation subjects shall enjoy the full extent of state power."

Moving on from these formal observations, the regional heads are perhaps the only link in the chain of authority determining the fate of the investment climate. At least, statistics from the last seven years of ratings testify convincingly to this fact.