Russian Economic Geography: Past and Present

Экономическая география России: история и современность

А. Маркевич, Т. МихайловаРоссийская 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 resources2. 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

1460

1462-1553

1553-1584

1581-1689

1682-1725

1762-1796

1801-1856

1856-1894

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

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 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

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

1913-1928, growth of industrial output

1928-1940, growth of industrial output

1940-1950, growth of industrial output

1950-1959, growth of industrial output

1959-1970, growth of industrial output

1970-1975, growth of industrial output

1980-1989, 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