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Geographical allocation of economic activity in Russia

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Geographical allocation of economic activity in Russia

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  1. Russian Economic Geography: Past and PresentЭкономическая география России: история и современность А. Маркевич, Т. МихайловаРоссийская Экономическая ШколаКруглый стол «Пространственная экономика и моделирование развития в федеративном государстве» 21 октября, 2011Центр по исследованию проблем федерализма и местного самоуправления в федеративном государстве

  2. Geographical allocation of economic activity in Russia = Three standard forces at work: • First nature of geography (endowment) • climate, terrain, natural resources • Second nature of geography (man-made infrastructure) • History • Policy These are the main factors explaining current location of productive resources • Third nature of geography (interaction among economic agents) • last 20 years

  3. Endowment

  4. History • History of Russian Empire = territorial expansion • Core regions (traditionally Russian): Moscow and north-west • The rest of the country was a frontier at some point in history • spatial population dynamics • History of the USSR = regional industrial policy

  5. Territorial expansion 1460 1462-1553 1553-1584 1581-1689 1682-1725 1762-1796 1801-1856 1856-1894

  6. Population diffusion in Russian Empire • Migration to better lands: shift to the south and eastward • Constraint: external (nomad) military threat • Low level of migration: 0.2 percent per year in the 17-19th Cc. (Mironov 1999) • State-controlled migration • Barriers to migration (elites demand cheap labor in ‘old’ regions) • Domar hypothesis (1970): serfdom introduced because of negative shock to labor to land ration in the 16th C. • Overpopulation in the central and black earth region

  7. Population geography in historical perspective 1795

  8. Population geography in historical perspective 1858

  9. Population geography in historical perspective 1905

  10. Population geography in historical perspective 1995

  11. Population diffusion in the 20th century • Late 19 – early 20th Cc. - relatively free migration • the only period in Russian history! • Rapid growth of migration to South Siberia and redistribution of labor onto available land • Constraints: transportation costs and poor access to credit (Chernina et al. 2011) • Back to state control during the Soviet times • Eastward (and to the north) shift of population because of industrial policy • The WWII shock

  12. So, how does Russian population geography compare to other countries’? • Too cold • large share in cold climates (Below -20ºC in january Russia – 25%, Canada < 5%) • Too spread out • Centered population concentration measures are among the lowest cross-country (Campante&Do, 2009). • Why? Not only endowment, but also Soviet policy. • Far from borders, ports, world markets • Soviet legacy • On the other hand, infrastructure, transport, political power are too centralized • connections center-periphery dominate • (exceptions in Siberia, b/c of linear gegraphical structure) • connections between peripheral regions are weak (L. Dienes: “Archipelago Russia”) • Why? Legacy of centralized state + territorial expansion

  13. Urbanization in historical perspective: • Imperial period • Expansion of territory  fortress/towns • Catherine the Second administrative reform • need region and district capitals • spread them over the territory • Non-industrial occupations of urban citizens • ‘city’ was a legal, not economic, category • Regulation of mobility and occupation of urban citizens by the state • Soviet period • Move labor to natural resources and construct new cities where necessary • Mono-cities and working settlements • Rapid growth of large cities after the WWII

  14. So, what do we know about Russian cities? • too many of them for the population size • meaning, they are too small on average too few of them for the territory • too few of them for the territory • meaning, they are too far away from each other (Treivish, 2007) Legacy of both RE and USSR (WDR 2009: isolation of small cities, urbanization data overstated)  Agglomeration externalities are weak (exceptions are few: Msk, SPb, Ekt,…) • many are essentially rural population centers • was this way since imperial times

  15. Industrial and regional policy in USSR • Stated goal of regional equality • Was it achieved? No • Did it change regional structure of industry compared to the counterfactual? Likely, yes. • Consumer goods production is too spread out • Indirect evidence: local monopolies in consumer good production (Ickes), violation of one-price law (Glushenko, others) • Emphasis on proximity to natural resources + rigidity of Soviet capital investmentsrelative prices change, attraction of resources change, but industries are still there

  16. 1913-1928, growth of industrial output

  17. 1928-1940, growth of industrial output

  18. 1940-1950, growth of industrial output

  19. 1950-1959, growth of industrial output

  20. 1959-1970, growth of industrial output

  21. 1970-1975, growth of industrial output

  22. 1980-1989, growth of industrial output

  23. Soviet regional policy • South-western Siberia grew faster than average, always • Southern ethnic republics • Other regional priorities changed in “waves” • North, Far East – more often Major shift of population to the east

  24. Transition and present time • Population migration • General trend: from north and east to south and west (reversal of Soviet subsidized trend), concentration (Heleniak, 2002, Kim 2007, others) • Exceptions: oil regions • Regional investment • market potential attracts, remoteness dampens investment, concentration (Brown at al, 2008, others) • Exceptions: oil regions • Divergence of regional incomes, productivity, quality of life (Lugovoi et al, 2007) • mitigated partially through transfers • exceptions: neighbours of rich become a bit richer (Kholodilin et al, 2008)

  25. Conclusions • Economic Geography of Russia now is a product of history: • History = history of state’s involvement in the economy • free migration of factors was an exception, not a rule • Soviet regional policy is most important legacy • But Soviet policies had Imperial legacy as a starting point, and some of it still survives • International experience suggests further spatial concentration of economic activity, and data support this

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