Comparative Economic Systems in the Context of Northern Regional Economies. Gorm Winther Professor, Ph.D. The Dept. of Development & Planning Aalborg University, Denmark

Source: Gerard Duhaime and Andrée Caron

How Do we Compare Economies? Classifying economies:Classifying economies: -Resource allocation -Forms of Ownership -Economic Planning -Income distribution Evaluation criterias (empirical analysis)Evaluation criterias (empirical analysis)Sources: Morris Bernstein: Comparative Economic Systems: Models and Cases) J. Barclay Rosser jr. & Marina V. Rosser: Comparative Economics in a Transforming World Economy.

Ownership: Social Co-ordination (resource allocation): TraditionalPlanningMarket Compacts & Agreements Non-ownership, simple ownership of equipment Subsistence economy, (Hunting & fishing, non- monetary) Subsistence Economy central planning or indicative planning Subsistence Economy in system based on market allocation Subsistence Economy in system based on compacts and agreements State ownership Subsistence Economy and an Etatist System Central planning in an Etatist system Market socialism ‘Bottom up’ planning in a market socialist economy Private ownership Subsistence economy and Capitalism Indicative planning in a capitalist market system. ‘Laissez faire’ Capitalism Capitalism Co-operative ownership Subsistence economy and Cooperative system Indicative planning in a market socialist system. Cooperatives in a capitalist or market socialist economy ‘Bottom up’ planning in a self- managed economy

Types of Ownership in Northern Regional Economies Non-ownership or little ownership (traditional). Regional corporations (Makkivik Corporation indigenous ownership - peoples capitalism). State Ownership (the Government budget or stock ownership). Local State ownership. Traditional Private ownership. Co-operative societies (multi purpose or members’ interests. Joint Ventures – State and Private. Employee ownership Suppliers ownership

Ressource allocation in Northern Economies (Regions in Arcticstat) Comprehensive remnants of State ownership in Arkhangelsk, ChukChi, Evenk, Karelia, Kanthy Mansii, Komi, Koryak, Magadan, Murmansk, Nenets, Sakha Taymyr (Dolgan-Nenets), Yamal-Nenets. Comprehensive State Ownership and Government in Greenland Comprehensive Government in Nunavut. Scandinavian Welfare State in North Ostrobothnia, Kainu, Lapland, North and West Bothnia, Nordland, Troms, Finmark and Iceland. Yet Government activities still play a significant role Alaska closest to the ideal of market capitalism, yet different from other states in the US Kollekti- vism %: Transfers /BNP: Alaska Lapland, Oulu prov Island Nunavut Grønland

Modified Market Capitalism: Alaska Welfare Market Systems Lapland, North Ostrobothnia, Kainuu Nord and Västerbotten Iceland Troms, Nordland, Finmark Etatism Former Command Etatist Northern Russia Traditional and Transfer Economy Nunavut Modern and Transfer Economy Greenland

Table x: Real Regional GDP Data to Real National Data (2002). ___________________________________________________________ Per Capita RegionalRegional GDP/National perGDP per Capita GDPEmployed/ National GDP per Employed.1Modified Market Capitalism: Alaska1,281,27 Social Market Capitalism Lapland, North East Bothnia, Kainu0,860,88 North and West Bothnia20,790,86 Iceland3n.a.n.a. Troms, Nordland, Finmark40,570,57 Etatism Former Central Command: Northern Russia0,270,25 Transfer & traditional: Nunavut0,400,37 Transfer & Modern: Greenland50,640,62 1. National data obtained from national statistical bureaus, OECD and CIA 2. Data on GDP is for Iceland is the only independent country of the regions. 4. Data for the year Data on Greenland GDP does not include the block grant from the Danish State which is approximately 38% of the GDP in Thus the gross national disposable income is much higher. The data for Nunavut does not include transfers which is 72% of GDP. ___________________________________________________________

Table x: Real per Capita Average Annual Growth ___________________________________________________________Modified Market Capitalism: Alaska 5,6% Social Market Capitalism Lapland, North East Bothnia, Kainu 0,9% North and West Bothnia 8,0% Iceland 4,0% Troms, Nordland, Finmark 3,9% Etatism Former Central Command: Northern Russia 20,3% Transfer & traditional: Nunavut 4,3% Transfer & Modern: Greenland 2,2% ___________________________________________________________

Causality: ’Collectivism’ and GDP per capita (Blue curve Right vertical axis – Red left axis)

’Collectivism’ to a Crude Productivity Proxy

’Collectivism’ to Annual Average Growth

’Collectivism’ to Unemployment 2002

’Collectivism’ to HDI

Real GDPReal GDP/Capita Tabel x: Splitting the Sample and Adding Canadian territories. Real GDPReal GDP/Capita Gov. employment/GDP per Growth Employment TotalEmployed (PPP US$) (%) Lapland0, ,0 2,6 North Ostrobothnia0, ,8 2,1 Kainuu0, ,6 2,7 Greenland0, ,6 2,2 North Bothnia0, ,0 5,0 West Bothnia0, ,5 5,2 Nunavut0, ,5 4,3 Yukon0, ,5 4,9 Northwest0, ,7 7,9 Iceland0, ,3 4,0 Troms0, ,0 3,4 Nordland0, ,3 5,6 Finmark0, ,0 5,2 Alaska0, ,7 5,6 Arkhangelsk0, ,316,1 Chukchi0, ,8 7,9 Evenk0, ,3 8,4 Karelia0, ,412,1 Khanty-Mansii0, ,025,2 Komi0, ,915,4 Koryak0, ,4 3,3 Magadan0, ,3- 4,2 Murmansk0, ,716,5 Nenets0, ,027,3 Sakha0, ,3 7,1 Taimur (Dolgan-Nenets)0, ,3 10,4 Yamal-Nenets0, ,0 9,0

Table: OLS Regressions and Correlations of Performance Variables and the Government Employment to Total Employment Rate. ___________________________________________________________(N=27) RegressionMultiple RR2 Coefficients(correlations) Dependent variables: Real GDP per Employed* ,550,30 Real GDP Annual Average Growth ,074- 0, ___________________________________________________________ * Statistical discernible beyond the 1% level of a t-test. The real GDP per employed regression: The real GDP regression: ___________________________________________________________

Table x: Population and Net Out migration of the Russian North ___________________________________________________________ Population: Net Out Migration Migration___________________________________________________________ Arkhangelsk Chukchi Evenk Karelia Khanti-M Komi Koryak Murmansk Nenets Taimur Yamal N Magadan Sakha Total ___________________________________________________________

Methodological Problems Lurking background variables may be as explanatory (Stock of resources, geography, real, human and social capital, innovations)? ARCTICSTAT not Consistent in the Data Catch both in relation to cross section and time series analysis? A Compilation from different sources on national income data – different methods? Arbitrariness in Classifications? Comparability (lack of disaggregated data)? Problems of Sampling? The PPP problem (The PPP analysis of Greenland and Denmark in 1994)? Productivy measures (Total Factor Productivity, Capital Productivity)? Productivity or lack of aggregate demand? Arbitrariness related to the HDI (The goal posts)? The subsistence economy?

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