IMF Working Papers

The Russian State’s Size and its Footprint: Have They Increased?

Author/Editor:

Gabriel Di Bella ; Oksana Dynnikova ; Slavi T Slavov

Publication Date:

March 8, 2019

Electronic Access:

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Summary:

The short answer: The size of the Russian State has not increased much in the last few years, but its economic footprint remains significant. Concretely, the state's size increased from about 32 percent of GDP in 2012 to 33 percent in 2016, not far from the EBRD's estimate of 35 percent for 2005-10. This is different from the mainstream narrative, which contends that the state's size doubled in the last decade. However, a deep state footprint is reflected in a relatively high state share in formal sector activity (close to 40 percent) and formal sector employment (about 50 percent). The deep footprint is also reflected in market competition and efficiency. Although sectors in which the state is present are more concentrated, concentration is large even in sectors where the state's share is low. This suggests the need to protect and promote competition, in particular in state procurement. Finally, state-owned enterprises' performance appears weaker than that of privately-owned firms, which may be subtracting from growth.

Series:

Working Paper No. 2019/053

Subject:

Competition Economic sectors Employment Expenditure Financial markets Labor Public employment Public sector State equity participation Taxes