Evolution of spatial distribution of economic activity in Russia

Abstract

The study is based on the idea of plurality of spatial equilibrium and hypotheses of agglomeration economies. The spatial concentration indices are analyzed and econometric estimates are given. It is shown that evolution of the spatial distribution of economic activity in Russia is moving toward its concentration. Obviously, the spatial model of development is changing to a new one, which is characterized by a higher concentration of economic activity and, consequently, a higher level of interregional heterogeneity. Noticeable reallocation of production and output factors from East to West is not observed. It has been concluded that Russian regional policy aimed at supporting “points of growth” and “priority areas of development” is ineffective at present. Due to agglomeration mechanisms, territories with a growing economy can improve the dynamics of their development on their own, without state support. Agglomeration processes occur throughout Russia; their speed is only slightly lower in the East. At a time when interregional competition dominates cooperation, spatial externalities are negative, and government regulation focused on the support of dynamic economies can lead to further polarization. Regional policy aimed at smoothing differences between regions is a more sensible choice. An additional argument in its favor is federal restrictions in the form of a state system and threat of separatism.