One defining feature of any federalist process is the pattern of intergovernmental fiscal flows. This work is an attempt to uncover the logic behind the pattern of fiscal flows in the Russian Federation soon after the break up of Soviet Union. The general consensus seemed to be that there is no discernible pattern to these flows and at best they are determined purely by politically troublesome behavior by the regional players. The main finding here is that initial conditions are important in determining the redistributive pattern and that there is a sound economic and political logic to this...