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Russian Manufacturing and the Threat of ‘Dutch Disease': A Comparison of Competitiveness Developments in Russian and Ukrainian Industry

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  • Rudiger Ahrend
  • Donato de Rosa
  • William Tompson

Abstract

This paper examines the development of Russian industry in comparison with that of Ukrainian industry during 1995–2004 in an effort to ascertain to what extent, if any, Russian manufacturing showed signs of succumbing to ‘Dutch disease’. Ukraine and Russia began the market transition with broadly similar institutions, industrial structures and levels of technology, and the economic reforms implemented in the two countries were also similar, although Ukraine was reckoned to lag behind Russia in many areas. The main difference between them is Russia’s far greater resource wealth. It follows that differences in industrial development since 1991 may to some degree be attributable to differences in initial natural resource endowments. In short, Ukraine could provide a rough approximation of how a resource-poor Russia might have developed over the transition. Le secteur manufacturier russe et la menace du « syndrome néerlandais » Comparaison du développement de la compétitivité des industries russe et ukrainienne Cette étude analyse le développement de l’industrie russe en le comparant avec celui de l’industrie ukrainienne sur la période 1995-2004, afin d’établir - si tel était le cas - dans quelle mesure l’industrie manufacturière en Russie serait affectée par le ‘syndrome néerlandais’. L’Ukraine et la Russie ont commencé leur transition vers l’économie de marché avec des institutions, des structures industrielles et des niveaux de technologie globalement similaires et les réformes mises en œuvre dans les deux pays ont également suivi une voie similaire, même si l’Ukraine est considérée comme étant en retard par rapport à la Russie dans beaucoup de domaines. La différence principale entre les deux pays est la richesse en ressources naturelles, bien plus importante en Russie. Il en résulte que les différences dans le développement industriel depuis 1991 peuvent, dans une certaine mesure, être attribuées aux différences de dotations intiales en ressources naturelles. En résumé, l’Ukraine peut fournir une approximation fruste de la manière dont une Russie pauvre en ressources naturelles aurait pu se développer sur la période de transition.

Suggested Citation

  • Rudiger Ahrend & Donato de Rosa & William Tompson, 2007. "Russian Manufacturing and the Threat of ‘Dutch Disease': A Comparison of Competitiveness Developments in Russian and Ukrainian Industry," OECD Economics Department Working Papers 540, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:540-en
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    File URL: http://dx.doi.org/10.1787/322823013852
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    References listed on IDEAS

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    1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
    2. S. Guriev & G. Egorov & K. Sonin., 2007. "Media Freedom, Bureaucratic Incentives, and the Resource Curse," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    3. Isabelle Joumard & Per Mathis Kongsrud & Young-Sook Nam & Robert Price, 2004. "Enhancing the Cost Effectiveness of Public Spending: Experience in OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2003(2), pages 109-161.
    4. Phyllis Dininio & Robert W. Orttung, 2004. "Explaining Patterns of Corruption in the Russian Regions," William Davidson Institute Working Papers Series 727, William Davidson Institute at the University of Michigan.
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    Citations

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    Cited by:

    1. Clemens, Marius & Fuhrmann, Wilfried, 2008. "Rohstoffbasierte Staatsfonds: Theorie und Empirie
      [Resource-based sovereign wealth funds]
      ," MPRA Paper 16933, University Library of Munich, Germany.
    2. repec:eco:journ2:2017-04-02 is not listed on IDEAS
    3. Mironov, Valeriy V. & Petronevich, Anna V., 2015. "Discovering the signs of Dutch disease in Russia," Resources Policy, Elsevier, vol. 46(P2), pages 97-112.
    4. Sergei Guriev & Alexander Plekhanov & Konstantin Sonin, 2009. "Development Based on Commodity Revenues?," Sciences Po publications info:hdl:2441/106i379teb8, Sciences Po.
    5. Bernardina Algieri, 2011. "The Dutch Disease: evidences from Russia," Economic Change and Restructuring, Springer, vol. 44(3), pages 243-277, August.
    6. Balázs Égert, 2012. "Dutch diease in the post-soviet countries of central and south-west Asia: How contagious is it?," Post-Print hal-01385841, HAL.
    7. Kojo, Naoko C., 2014. "Demystifying Dutch disease," Policy Research Working Paper Series 6981, The World Bank.
    8. repec:zbw:hohpro:338 is not listed on IDEAS
    9. Balázs Égert, 2009. "Dutch Disease in Former Soviet Union: Witch-Hunting," CASE Network Studies and Analyses 0380, CASE-Center for Social and Economic Research.
    10. Yulia Vymyatnina, 2014. "Spillover Effects in the Customs Union of Russia, Kazakhstan and Belarus," EcoMod2014 7160, EcoMod.
    11. repec:old:wpaper:338 is not listed on IDEAS
    12. Dülger, Fikret & Lopcu, Kenan & Burgaç, Almıla & Ballı, Esra, 2013. "Is Russia suffering from Dutch Disease? Cointegration with structural break," Resources Policy, Elsevier, vol. 38(4), pages 605-612.
    13. Rudiger Ahrend, 2008. "Can Russia Sustain Strong Growth As a Resource Based Economy?," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(2), pages 3-8, July.
    14. Christoph Böhringer & Victoria Alexeeva-Talebi, 2011. "Unilateral climate policy and competitiveness: The implications of differential emission pricing," Working Papers V-338-11, University of Oldenburg, Department of Economics, revised Jun 2011.

    More about this item

    Keywords

    avantage comparatif révélé; competitiveness; compétitivité; coût unitaire de main-d'œuvre; dutch disease; gas; gaz; industrie; industry; natural resources; oil; productivity; productivité; pétrole; ressources naturelles; restructuration; restructuring; revealed comparative advantage; Russia; Russie; salaires; syndrome néerlandais; transition; transition; Ukraine; Ukraine; unit labour costs; wages;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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