The political economy of structural change in Russia

The Russian Federation provides a valuable laboratory to study the impact of political forces on the process of structural reform. We examine changes in the industrial structure of employment across Russian regions and assess the importance of legacy factors, political factors, and success factors in explaining this process. We discuss the problems introduced by federalism in the transition process. We find that initial conditions such as natural resource potential, climate, and industrial specialization explain more of the variation in industrial restructuring than political variables.