Understanding Russian regions’ economic performance during periods of decline and growth—An extreme bound analysis approach
AbstractThis article uses “extreme-bound”-type analysis to revisit the determinants behind the widely differing economic growth in Russian regions prior to the recent global financial crisis. Using data of regional growth in 1995–2006 for 77 Russian regions, it examines the growth drivers for the phase of economic decline up to 1998 and for the period of strong growth afterwards separately. Looking at forty variables considered to be potentially related to growth, it determines, for each of the two periods, the ones robustly associated with Russian economic performance. Among the variables considered are proxies of politico-institutional features, indicators of economic reform, and measurements of both economic and non-economic initial conditions. The main findings are as follows: during the period of economic decline up to 1998, differences in Russian regional growth were almost entirely driven by initial conditions, with resource and human capital endowments, industrial structure, and geographical location playing the dominant roles. However, after the 1998 crisis, the importance of initial conditions declined and was basically reduced to fuel production, advantageous geographical location, and population structure. There is also some evidence that more reform-oriented policies and better regional leadership made a difference. These results could be seen as pointing to determinants of economic performance in periods of actual economic decline being different from those in normal times of economic growth.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Systems.
Volume (Year): 36 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/inca/621171
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Russia; Transition; Regional economics; Extreme-bound analysis; Economic growth; Economic decline; Natural resources; Initial conditions; Economic reform; Political economy;
Other versions of this item:
- Rudiger Ahrend, 2008. "Understanding Russian Regions' Economic Performance during Periods of Decline and Growth: An Extreme-bound Analysis Approach," OECD Economics Department Working Papers 644, OECD Publishing.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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- Alexander Plekhanov & Asel Isakova, 2011. "Region-specific constraints to doing business: evidence from Russia," Working Papers 125, European Bank for Reconstruction and Development, Office of the Chief Economist.
- Lev Freinkman & Konstantin A. Kholodilin & Ulrich Thießen, 2009. "Incentive Effects of Fiscal Equalization: Has Russian Style Improved?," Discussion Papers of DIW Berlin 912, DIW Berlin, German Institute for Economic Research.
- Yakovlev, Andrei, 2011. "State-business relations in Russia in the 2000s: From the capture model to a variety of exchange models?," BOFIT Discussion Papers 10/2011, Bank of Finland, Institute for Economies in Transition.
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