A Methodological Framework for Evaluating Fiscal Autonomy in Post-Soviet Regions: Evidence from the Comparison of Andalusia and Adjara

Abstract

ABSTRACT: The aim of the study is to establish a scientific framework for evaluating regional fiscal autonomy in post-Soviet nations within the context of EU integration. The research employs two instruments: the Fiscal Autonomy Index (FAI) and the Regional Authority Index (RAI). Both devices are tailored to the characteristics of the post-Soviet institutional context. The empirical investigation encompasses two regions: Andalusia (Spain, FAI=74.3%) and Adjara (Georgia, FAI=34.7%). Data from 2015 to 2024 are utilised. The study's methodological contribution has three elements. Initially: establishment of standards for categorising shared/regulated taxes within the post-Soviet framework. Second: application of the RAI technique for autonomous entities within unitary states. Third: an examination of the link between Foreign Direct Investment (FDI) and economic progress in transitional economies (r=0.847). The primary finding of the study is that the 40% FAI threshold is essential. When a region's FAI falls below this threshold, it lacks adequate fiscal resources to successfully execute the EU's regional development program. The suggested methodological approach is relevant for evaluating regional reforms in other post-Soviet nations.

Keywords: Fiscal Autonomy; Regional Decentralization; Post-Soviet Transformation; EU Integration; Methodological Framework; Regional Authority Index