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Natural Resources And Economic Growth In Russia’s Regions

Author

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  • Michael Alexeev

    () (Indiana University (Bloomington)
    Russian Presidential Academy of National Economy and Public Administration)

  • Andrey Chernyavskiy

    () (National Research University Higher School of Economics)

Abstract

We examine the impact of natural resources on economic growth in Russia’s regions since the introduction of the mineral tax in 2002. Using novel measures of natural resource rents produced in, but not necessarily appropriated by the regions (mineral tax collections), we demonstrate that mineral wealth has not significantly affected regional economic growth since 2002, although mineral-rich regions are significantly richer than the other regions. These results are contrary to the “resource curse” hypothesis. The absence of growth benefits to resource-endowed regions, however, is also at odds with the clearly beneficial impact of natural resources on the economic growth of t the country as a whole. We conclude that the Russian central government was successful in taxing away incremental regional resource rents during 2002-2011, but the regions preserved their pre-2002 benefits derived from mineral wealth.

Suggested Citation

  • Michael Alexeev & Andrey Chernyavskiy, 2014. "Natural Resources And Economic Growth In Russia’s Regions," HSE Working papers WP BRP 55/EC/2014, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:55/ec/2014
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    File URL: http://www.hse.ru/data/2014/04/08/1320527346/55EC2014.pdf
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    References listed on IDEAS

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    1. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
    2. Oleg Lugovoy & Vladimir V. Dashkeyev & Ilya Mazaev & Denis Fomchenko & Albert Hecht, 2007. "Analysis of Economic Growth in Regions: Geographical and Institutional Aspect," Published Papers 5, Gaidar Institute for Economic Policy, revised 2007.
    3. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
    4. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    5. Freinkman, Lev & Plekhanov, Alexander, 2009. "Fiscal Decentralization in Rentier Regions: Evidence from Russia," World Development, Elsevier, vol. 37(2), pages 503-512, February.
    6. James, Alex & Aadland, David, 2011. "The curse of natural resources: An empirical investigation of U.S. counties," Resource and Energy Economics, Elsevier, vol. 33(2), pages 440-453, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    natural resources; regional growth; taxation of minerals;

    JEL classification:

    • P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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