growth - Policy Reform and Growth in Post-Soviet Russia...

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Policy Reform and Growth in Post-Soviet Russia Daniel Berkowitz and David N. DeJong Department of Economics; University of Pittsburgh; Pittsburgh, PA 15260 [email protected]; [email protected] First Version: January 2000 This Revision: July 2001 Abstract In pursuit of its transition from a command to a market economy, Russia has witnessed enormous regional differences in economic growth rates. Moreover, the implementation of economic reforms has also differed markedly across regions. We analyze 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 differences in price liberalization policies exhibit a positive direct correspondence with growth. We also find that regional differences in large-scale privatization exhibit a positive correspondence with the regional formation of new legal enterprises, which in turn exhibits a strong positive correspondence with growth. Acknowledgments: We thank Anders Aslund, Gleb Bylov, Lev Freinkman, Yelena Borisovna Frolova, Clifford Gaddy, Evgeny Gavrilenkov, Timothy Heleniak, Alastair McAuley, Thomas Richardson, Randi Ryterman and especially Nina Chebotarieva for their help with the data used in this study. We also thank John McMillan, Peter Murrell, Harald Uhlig and two anonymous referees for many useful comments. For providing financial support, Berkowitz is indebted to the National Council for Soviet and East European Studies (under contracts #807-09 and #811-12); the National Science Foundation (under grant SBR-9730499); and the Center for Russian and East European Studies at the University of Pittsburgh. The usual caveat applies.
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1. Introduction In pursuit of its transition from a command to a market economy, Russia has experienced enormous regional differences in economic growth rates. Over the period 1993:IV through 1997:IV, the 48 regions in Russia in which the capital city comprises at least 30% of the total regional population had annual average growth rates in real per capita income ranging from –9.0 to 15.7%. 1 Moreover, the implementation of economic reforms following the breakup of the Soviet Union has also differed markedly across regions. For example, Magadan has aggressively pursued small- and large-enterprise privatization reforms, but has been slow to liberalize prices; the opposite is true in Moscow. And while Saratov and Kaliningrad have aggressively implemented both privatization and price-liberalization reforms, Ulyanovsk and the secessionist Republics of Bashkortostan and Tatarstan have done neither. We analyze whether regional differences in the implementation of price-liberalization and privatization reform policies can account for regional differences in growth rates, and conclude that to a considerable degree, they can. Specifically, we find that regional differences in price-liberalization policies exhibit a positive direct correspondence with growth. We also
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  • Spring '07
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  • Economics, Oblasts of Russia, Karelian Republic Murmansk Oblast St. Petersburg Kaliningrad Oblast Novgorod Oblast Bryansk Oblast Ivanovo Oblast Kaluga Oblast Kostroma Oblast Moscow Oryol Oblast Ryazan Oblast Smolensk Oblast Tula Oblast Yaroslavl Oblast Mariy-El Republic Mordovian Repu, large-scale privatization, new-enterprise formation

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growth - Policy Reform and Growth in Post-Soviet Russia...

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