| Abstract: |
This study comprises an introductory section and three essays analysing
Russia’s economic transition from the early 1990s up to the present. The
papers present a combination of both theoretical and empirical analysis on
some of the key issues Russia has faced during its somewhat troublesome
transformation from state-controlled command economy to market-based economy.
The first essay analyses fiscal competition for mobile capital between
identical regions in a transition country. A standard tax competition
framework is extended to account for two features of a transition economy: the
presence of two sectors, old and new, which differ in productivity; and a
non-benevolent regional decision-maker. It is shown that in very early phase
of transition, when the old sector clearly dominates, consumers in a
transition economy may be better off in a competitive equilibrium.
Decision-makers, on the other hand, will prefer to coordinate their fiscal
policies. The second essay uses annual data for 1992–2003 to examine income
dispersion and convergence across 76 Russian regions. Wide disparities in
income levels have indeed emerged during the transition period. Dispersion has
increased most among the initially better-off regions, whereas for the
initially poorer regions no clear trend of divergence or convergence could be
established. Further, some – albeit not highly robust – evidence was found of
both unconditional and conditional convergence, especially among the initially
richer regions. Finally, it is observed that there is much less evidence of
convergence after the economic crisis of 1998. The third essay analyses
industrial firms’ engagement in provision of infrastructure services, such as
heating, electricity and road maintenance. Using a unique dataset of 404 large
and medium-sized industrial enterprises in 40 regions of Russia, the essay
examines public infrastructure provision by Russian industrial enterprises. It
is found that to a large degree engagement in infrastructure provision, as
proxied by district heating production, is a Soviet legacy. Secondly, firms
providing district heating to users outside their plant area are more likely
to have close and multidimensional relations with the local public sector. |