Transition and Regional Inequality in Russia: Reorganization or Procrastination?

IMF Working Papers, October 1, 2002

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Transition and Regional Inequality in Russia: Reorganization or Procrastination?

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Bibliographic details

• Authors: Irina Dolinskaya, Irina Tytell
• Published: October 1, 2002
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451858358.001

Summary

• This paper analyzes the evolution of interregional income inequality during transition in Russia.
• The transition matrix approach reveals that between 1991 and 1997 income mobility tended toward a highly uneven long-term distribution with the majority of regions at low income levels and a minority of higher-income regions, in sharp contrast to pretransition times.
• The ordered logit analysis suggests that the more successful regions prospered on account of their natural resources, while continuing to resist economic reorganization by supporting traditional enterprises.
• The less-successful regions appeared trapped at low income levels due to uncompetitive industries and lack of resources needed for restructuring.

Methods and Analytical Approach

• Transition matrix approach:
  • Used to assess income mobility and long-term distribution patterns across Russian regions between 1991 and 1997.
• Ordered logit analysis:
  • Used to identify correlates of regional success and persistence in income categories, highlighting the roles of natural resources, enterprise restructuring, and industrial competitiveness.

Key Findings

• Time frame of primary analysis: 1991 and 1997.
• Principal outcome:
  • Income mobility during 1991–1997 tended toward a highly uneven long-term distribution:
  • Majority of regions at low income levels.
  • Minority of regions at higher income levels.
  • This pattern stood in sharp contrast to pretransition times.
• Determinants of regional outcomes:
  • More-successful regions:
  • Prosperity associated with natural resources.
  • Continued support for traditional enterprises, resisting economic reorganization.
  • Less-successful regions:
  • Trapped at low income levels.
  • Constrained by uncompetitive industries and lack of resources for restructuring.

Content in this bundle

• Transition and Regional Inequality in Russia: Reorganization or Procrastination? - WP/02/169
  • Transition and Regional Inequality in Russia: Reorganization or Procrastination? - WP/02/169 (Markdown version)
  • Transition and Regional Inequality in Russia: Reorganization or Procrastination? - WP/02/169 (PDF)