Creative destruction on the Chechen frontier?

Abstract

The economic performance of Chechnya is examined for the first time using an aggregate stochastic frontier production function method. The 15 sectors of the economy are found to be quite inefficient in the use of capital and labour to produce aggregate output. Extensive growth is likely to continue though at a lower rate as federal subsidies from Moscow end. Intensive growth is unlikely given the lack of foreign investment and the authoritarian political system. Some evidence for the emergence of a market economy is found, suggesting that Kadyrov has overseen an economic transition.