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

Geographical allocation of economic activity in Russia = Three standard forces at work: 1.First nature of geography (endowment) climate, terrain, natural resources 2.Second nature of geography (man-made infrastructure) History Policy These are the main factors explaining current location of productive resources 3.Third nature of geography (interaction among economic agents) last 20 years

Endowment

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

Territorial expansion

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 th 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

Population geography in historical perspective 1795

Population geography in historical perspective 1858

Population geography in historical perspective 1905

Population geography in historical perspective 1995

Population diffusion in the 20 th century Late 19 – early 20 th 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

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

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

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

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

, growth of industrial output

, growth of industrial output

, growth of industrial output

, growth of industrial output

, growth of industrial output

, growth of industrial output

, growth of industrial output

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

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)

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