Analysis of the Dutch Disease in Russian Economy
Date of Award
2008
Document Type
Thesis
Degree Name
Bachelors
Department
Social Sciences
First Advisor
Coe, Richard
Keywords
Dutch Disease, Russian Federation, Manufacturing Sector
Area of Concentration
Economics
Abstract
Russia has an abundance of natural resources, most notably oil. The question addressed in this thesis is whether this abundance has resulted in Russia experiencing the natural resource curse, often referred to as the Dutch Disease. The Dutch Disease occurs when an abundance of natural resources results in negative economic growth. This phenomenon has been attributed to three factors: 1. Sudden find of natural resources places the traditional manufacturing sector under pressure and this pressure results in de-industrialization of the sector via outflow of labor and capital. 2. Natural-resource-rich economies seem especially prone to socially damaging rent-seeking behavior in a form of corruption that affects business and government, thereby distorting the allocation of resources and reducing both economic efficiency and social equity. 3. Nations that are confident that their natural resources are their most important asset may inadvertently, and perhaps even deliberately, neglect the development of their human resources by devoting inadequate attention and expenditure to education. Based on these criteria, Russia has a clear case of early Dutch Disease where its manufacturing base is slowly deteriorating, while resource extraction sector is expanding; corruption levels have undermined entrepreneurial activity; education system lacks funding and clear agenda. Necessary measures have to be taken immediately to prevent the country from contracting a full-blown Dutch Disease.
Recommended Citation
Dubrovsky, Dmitriy, "Analysis of the Dutch Disease in Russian Economy" (2008). Theses & ETDs. 3929.
https://digitalcommons.ncf.edu/theses_etds/3929
Rights
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