Regional Supply Chain Structure and Centralization of the Economy of Russia

Abstract

  This paper deals with the influence of the regional supply chain structure of the Russian economy on its evolution towards a market or plan. This influence is analyzed with the help of a two-sector model of the economic system. The logic of the two-sector model presupposes dividing the economy into resource-abundant and resource-insufficient sectors. The movement of the economy towards the market or towards the plan is determined by the proportion between these sectors. If we take the resource-abundant sector as a given, then the growth of the resource-insufficient causes the downturn of market institutions and the actualization of the plan institutions. Using the empirical material, the paper explores such elements of the resource-insufficient sector of Russia's regions as the presence of unprofitable enterprises, the production of social benefits, innovations, armament and investments. It is revealed that the actual distribution of these elements of the resource-insufficient sector by regions of Russia provides structural conditions for the functioning of the Russian economy in the market mode. However, if we consider the selected elements of the resource-insufficient sector not in fact, but in relation to a certain social norm, Russia, in the regional context, features a sharp gap and dispersion in innovation and production of social benefits. If these elements of the regional supply chain structure are brought into line with the norm, then taking into account the specific Russian infrastructure and the capital intensity factor, this will lead to a sharp increase in investments, and consequently a resource-insufficient sector. The growth of the resource-insufficient sector will, in accordance with the theoretical logic of the two-sector model, activate the plan institutes. Given that the Russian economy is the largest in the EEU, this will entail either the drift of the economy of the EEU towards the plan, or activate the processes of disintegration.