Is Russia's Growth a 'Flash in the Pan'?

44 Pages Posted: 22 Jun 2007

See all articles by Daniel Berkowitz

Daniel Berkowitz

University of Pittsburgh - Department of Economics

Yadviga Semikolenova

University of Pittsburgh - Katz Graduate School of Business - Economics Group

Date Written: June 7, 2007

Abstract

Russia's impressive growth record since 2000 is driven largely by high world oil prices (Desai, 2006). This rapid growth, however, may be a "flash in the pan" because high oil prices enable the Russian government to engage in rent-seeking and to postpone deep restructuring (Berglöf, et al, 2003). We use detailed crude oil shipping export data in 2003 and 2005 to test for whether the Russian federal government has used its control over exports primarily to extract rents or to promote efficiency. If the government is engaged in rent seeking, this is suggestive that growth since 2000 is a "flash in the pan". But, if the government has restructured its regulation of crude oil exports, then there is reason to be more optimistic. We find that by 2005 the Russian federal government promotes efficient oil exporting. Moreover, in 2005 economic criteria including transport cost, production costs and productivity are more important determinants of export access than at the beginning of the Putin administration in 1999.

Keywords: high oil prices, rent-seeking, control, ownership, holdup

JEL Classification: P26, P28, L78

Suggested Citation

Berkowitz, Daniel and Semikolenova, Yadviga, Is Russia's Growth a 'Flash in the Pan'? (June 7, 2007). Available at SSRN: https://ssrn.com/abstract=993901 or http://dx.doi.org/10.2139/ssrn.993901

Daniel Berkowitz (Contact Author)

University of Pittsburgh - Department of Economics ( email )

4711 WWPH
Pittsburgh, PA 15260
United States
412-648-7072 (Phone)
412-648-3011 (Fax)

HOME PAGE: http://www.pitt.edu/~dmberk

Yadviga Semikolenova

University of Pittsburgh - Katz Graduate School of Business - Economics Group ( email )

United States

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