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Interregional Inequality and Federal Expenditures and Transfers in Russia

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  • Torbenko, Alexander

Abstract

The paper considers the influence of federal government expenditures and transfers on interregional convergence in gross regional product (GRP) per capita and wages in Russia over 2005--2011. Such an influence is not found. The federal government's policy was reactive and was not focused on decreasing interregional inequality during this period. Wages growth depended more on GRP per capita growth than on federal government spendings and transfers per capita growth. The dependence between GRP per capita growth and federal government spendings and transfers per capita growth was very weak. Moreover, the paper shows that in this period inequality of Russian regions in GRP per capita and wages was diminishing. In the given period in Russian regions there existed unconditional $\beta$-convergence, poor regions grew faster than rich ones. This result confirms the prediction of neoclassical theory of regional growth and challenges a new economic geography prediction. Comparing our results to the results of previous research the process of interregional convergence in Russia can be seen. In the 1990s, with the state pressure having been eliminated, the differentiation between Russian regions began, while in the 2000s a natural process of (conditional or unconditional) convergence started.

Suggested Citation

  • Torbenko, Alexander, 2014. "Interregional Inequality and Federal Expenditures and Transfers in Russia," MPRA Paper 59076, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:59076
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    File URL: https://mpra.ub.uni-muenchen.de/59076/1/MPRA_paper_59076.pdf
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    References listed on IDEAS

    as
    1. Sergei Guriev & Elena Vakulenko, 2012. "Convergence between Russian regions," Working Papers w0180, New Economic School (NES).
    2. E. Kolomak., 2013. "Uneven Spatial Development in Russia: Explanations of New Economic Geography," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
    3. Ruslan Yemtsov, 2003. "Quo Vadis? Inequality and Poverty Dynamics across Russian Regions," WIDER Working Paper Series DP2003-67, World Institute for Development Economic Research (UNU-WIDER).
    4. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    5. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    convergence; federal expenditures and transfers; wages; Russia; regions; gross regional product;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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