The Industrialization and Economic Development of Russia through the Lens of a Neoclassical Growth Model

This article studies the structural transformation of Russia in 1885-1940 from an agrarian to an industrial economy through the lens of a two-sector neoclassical growth model. We construct a data set that covers Tsarist Russia during 1885-1913 and Soviet Union during 1928-1940. We develop a methodol...

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Bibliographic Details
Published in:The Review of economic studies 2017-04, Vol.84 (2 (299)), p.613-649
Main Authors: CHEREMUKHIN, ANTON, GOLOSOV, MIKHAIL, GURIEV, SERGEI, TSYVINSKI, ALEH
Format: Article
Language:English
Subjects:
Agricultural production
Economic development
Economics and Finance
Growth models
Humanities and Social Sciences
Industrial development
Monopolies
Russia
Studies
Union of Soviet Socialist Republics
USSR
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Summary:This article studies the structural transformation of Russia in 1885-1940 from an agrarian to an industrial economy through the lens of a two-sector neoclassical growth model. We construct a data set that covers Tsarist Russia during 1885-1913 and Soviet Union during 1928-1940. We develop a methodology that allows us to identify the types of frictions and economic mechanisms that had the largest quantitative impact on Russian economic development. We find that entry barriers and monopoly power in the nonagricultural sector were the most important reason for Tsarist Russia's failure to industrialize before World War I. Soviet industrial transformation after 1928 was achieved primarily by reducing such frictions, albeit coinciding with a significantly lower performance of productivity in both agricultural and nonagricultural sectors. We find no evidence that Tsarist agricultural institutions were a significant barrier to labour reallocation to manufacturing, or that "Big Push" mechanisms were a major driver of Soviet growth.
ISSN:0034-6527
1467-937X
DOI:10.1093/restud/rdw026