Appendix A. Data Sources
Appendix B. Capital and Labor Utilization Rates
Appendix C. Growth Accounts Using Different Surveys
Brown, J. David, and J. Earle, 2006, “The Microeconomics of Creating Productive Jobs: A Synthesis of Firm-Level Studies in the Transition Economies,” World Bank Policy Research Paper 3886 (Washington: World Bank).
Calvo, G. and F. Coricelli, 1993, “Output Collapse in Eastern Europe–the role of Credit,” IMF Staff Papers, Vol. 40, No. 1, pp. 32–52.
Commander, Simon, and C. Mumssen, 1998, “Understanding Barter in Russia,” EBRD Working Paper 37 (London: European Bank for Reconstruction and Development).
De Broeck, Mark, and V. Koen, 2000, “The Great Contraction in Russia, the Baltic and Other Countries of the Former Soviet Union: A View from the Supply Side,” IMF Working Paper 00/32 (Washington: International Monetary Fund).
Djankov, Simeon, and P. Murrell, 2002, “Enterprise Restructuring in The Transitions: A Quantitative Survey,” Journal of Economic Literature, Vol. 40, No. 3, pp. 739–92.
Eilat, Yair, J. Sachs, and C. Zinnes, 2001, “The Gains from Privatization in the Transition Economies: Is “Change of Ownership” Enough?” IMF Staff Papers, Vol. 48, pp. 146–170.
Ericson, Richard, and B. Ickes, 2000, “A Model of Russia’s “Virtual Economy,” Pennsylvania State University Working Paper 317 (State College, PA: Penn. State Univ.).
Gregory, Paul, and V. Lazarev, 2004, “Structural Change in Russian Transition,” Yale University Economic Growth Center Discussion Paper 896 (New Haven, CT: Yale University).
Hendley, Kathryn, B. Ickes, P. Murrell, and R. Ryterman, 1997a, “Observations on the Use of Law by Russian Enterprises,” Post-Soviet Affairs, Vol. 13, No. 1, pp. 19–41.
Linn, Jonathan, 2004, “Economic (Dis) Integration Matters: The Soviet Collapse Revisited,” photocopy (Washington: The Brookings Institution).
Linz, Susan, and G. Krueger, 1998, “Enterprise Restructuring in Russia’s Transition Economy: Formal and Informal Mechanisms,” Williams Davidson Institute Working Paper 152 (Williamstown, MA: Williams College).
Malle, Silvana, 1987, “Capital Utilization and the Shift Coefficient of the Soviet Planning,” Economics of Planning, Vol. 21, pp. 63–86.
Marin, Dalia, and M. Schnitzel, 2005, “Disorganization and Financial Collapse,” European Economic Review, Elsevier Vol. 49(2), pp. 387–408.
Oomes, Nienke, A. Ilyina, P. Lohmus, M. Nkusu, and A. Spilimbergo, 2005, Russian Federation: Selected Issues. The Utilization-Adjusted Output Gap: Is the Russian Economy Overheating? IMF Country Report No. 05/379 (Washington: International Monetary Fund).
Sarel, Michael, 1997, “Growth and Productivity in ASEAN Countries,” IMF Working Paper 97/97. (Washington: International Monetary Fund).
Senhadji, Abdelhak, 1999, “Sources of Economic Growth: An Extensive Growth Accounting Exercise,” IMF Working Paper 99/77 (Washington: International Monetary Fund).
Shleifer, Andrei, and D. Treisman, 2005, “A Normal Country: Russia After Communism,” Journal of Economic Perspectives, Vol. 19, No. 1, pp. 151–74.
Presidential address to the Federal Assembly of the Russian Federation, November 2009.
Referred to as Russia afterwards.
See Linn (2004); Commander and Mummssen (1998); Gregory and Lazarev (2004); Djankov and Murrell (2002); and Schleifer and Treisman (2005) for discussion of characteristics of the pre-transition Soviet economy.
Commander and Mumssen (1998) explain that offsets and barter were commonly used to clear obligations between groups of firms, firms and the government, firms and utility companies, and utility companies and the government. See also Marin, Dalai, and Schnitzel (2003): Linz and Krueger (1998): and Hendley et al. (1997) for discussions of NMTs.
It is a common practice in growth accounting to adjust labor input for human capital quality. We have not done that because in Russia the transition process did not cause any significant change in educational attainment (see the UN Human Development Report, 2006).
See detailed description in WEO (2006). Employment shares are denoted by s and sectoral output shares by sy, sectors are denoted by j. Bosworth and Collins (2007) used a similar approach to show reallocation effects in the growth accounts of India and China.
During the Soviet period, enterprises kept no records of the effective number of workers; only attendance was registered. Attending but idle workers were controlled through ad hoc investigations by representatives of the communist party within the enterprise.
Goskomstat, Statistical Yearbook (2006), p. 327.
See Appendix B for the complete dataset on annual utilization rates from all three sources. Choice of the data for utilization rates affects levels of factor inputs but not trends and the main conclusions of the growth accounting exercise.
It is likely that newly emerging non-industrial enterprises had somewhat higher utilization rates than Soviet-style industrial enterprises. If this were the case, the assumption of common utilization rates would potentially bias the results of the growth accounting exercise: the contribution to growth from non-industrial sectors would become more significant, while cross sector reallocation (residual) effects less so.
In our growth accounting exercise we do not capture productivity gains or losses generated by factor reallocations between firms within sectors because subsectoral or enterprise level data are not available to us.
We measure the contribution to growth of the industrial sector and of all other sectors by multiplying average growth in output per worker by the sector’s output share at the beginning of each period.
Page 27, para 1.
The planner-enforced economic structure was quite different from market-economy structures of similar size. The Soviet economy had more capital-intensive industry and less activity in all other sectors than market economies of a similar size.
Montiel (2003) argues that in order for financial sector openness and reform to result in sustainable growth, the following sequence of reforms may be appropriate: first macroeconomic stabilization; then domestic financial sector reforms; and finally financial opening. In this way a prudently regulated and adequate banking sector could allocate resources to productive rather than speculative activities, thus enhancing the growth of the economy. Macroeconomic stabilization did precede financial opening in Russia but only by a year. Russia adopted an exchange rate peg with a preannounced corridor in 1995 and then in 1996 opened the door to foreign private capital. Because reform of the financial sector was incomplete, the centralized credit system benefited only privileged commercial banks, and few enterprises had any access to credit.
Large enterprises were built in remote regions, without consideration of transportation costs, primarily to create jobs there. Usually, health care, school, and other social development programs were built around them to support local communities. Restructuring these enterprises would thus have implied restructuring the social infrastructure of the region, which would have been costly in terms not only of livelihood but also of political stability.
Statistical Yearbook (2006), p. 331.