Accounting for Growth in Post-Soviet Russia

Abstract

In pursuit of its transition from a command to a market economy, post-Soviet Russia has witnessed enormous regional differences in economic growth rates. Moreover, the economic reforms implemented under this transition, while initiated at the federal level, have also differed markedly across regions, as regional governments have had considerable discretion over the implementation of reform policies in their jurisdictions. We exploit these differences in analyzing whether regional differences in reform policies can account for regional differences in growth rates, and conclude that to a considerable degree, they can. Most notably, we find that regional-government privatization initiatives and regional-government initiatives to gain control over their capital stock (e.g. plants, equipment, machinery and social infrastructure) have had a significant impact on the formation of new legal enterprises, which in turn has had a significant impact on economic growth.

JEL Classification: P24, R11, O18