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When Russia's housing allowance program, the country's first means-tested program, was introduced in 1994, it was truly innovative. But there were difficulties from the start, many arising from the division of authority for setting program parameters among different levels of government. In 1996, the program's original simple basis for benefit determination was seriously impaired by the introduction of different principles for very low-income households. The analysis presented here documents the impact of these variations on participation rates in a sample of Russian cities. Large inequities are obviously present in the treatment of similar households from city to city.