Natural Resources and Economic Growth in Russia's Regions

30 Pages Posted: 8 Apr 2014

See all articles by Michael Alexeev

Michael Alexeev

Indiana University Bloomington - Department of Economics; Russian Presidential Academy of National Economy and Public Administration

Andrey Chernyavskiy

National Research University Higher School of Economics

Date Written: April 7, 2014

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 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.

Keywords: natural resources, regional growth, taxation of minerals

JEL Classification: P28, R11, Q38

Suggested Citation

Alexeev, Michael V. and Chernyavskiy, Andrey, Natural Resources and Economic Growth in Russia's Regions (April 7, 2014). Higher School of Economics Research Paper No. WP BRP 55/EC/2014. Available at SSRN: https://ssrn.com/abstract=2421172 or http://dx.doi.org/10.2139/ssrn.2421172

Michael V. Alexeev

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall 105
Bloomington, IN 47405-6620
United States

Russian Presidential Academy of National Economy and Public Administration ( email )

pr. Vernadskogo, 84
Moscow, 119571
Russia

Andrey Chernyavskiy (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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