Regional Impacts of Russia’s Accession to the World Trade Organization

In this paper we develop a computable general equilibrium model of the regions of Russia to assess the impact of accession to the World Trade Organization (WTO) on the regions of Russia. We estimate that the average gain in welfare as a percentage of consumption for the whole country is 7.8 percent (or 4.3 percent of consumption); we estimate that three regions will gain considerably more: Northwest (11.2 percent), St. Petersburg (10.6 percent) and Far East (9.7 percent). We estimate that the Urals will gain only 6.2 percent of consumption, considerably less than the national average. The principal explanation in our central analysis for the differences across regions is the ability of the different regions to benefit from a reduction in barriers against foreign direct investment. The three regions with the largest welfare gains are clearly the regions with the estimated largest shares of multinational investment. But the Urals has attracted relatively little FDI in the service sectors. An additional reason for differences across regions is quantified in our sensitivity analysis: regions may gain more from WTO accession if they can succeed in creating a good investment climate.

Bibliographic Details

Main Authors:	Rutherford, Thomas, Tarr, David
Language:	English en_US
Published:	World Bank, Washington, DC 2006-09
Subjects:	AGGREGATE CONSUMPTION, AGGREGATE TRADE, ANTIDUMPING, ANTIDUMPING CASES, AVERAGE TARIFF, BUSINESS SERVICES, CITIES, COMPETITIVENESS, CONSTANT ELASTICITY OF TRANSFORMATION, CONSUMERS, COUNTERFACTUAL SIMULATIONS, CURRENCY, DEMAND FOR GOODS, ECONOMETRIC ESTIMATES, ECONOMIC GEOGRAPHY, ECONOMIC PERFORMANCE, ECONOMIC THEORY, ECONOMICS LITERATURE, ELASTICITY, ELASTICITY OF SUBSTITUTION, EQUILIBRIUM, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXPORT MARKETS, EXPORT TAXES, EXPORTERS, EXPORTS, EXTERNALITIES, FACTORS OF PRODUCTION, FIXED COSTS, FOREIGN BANKS, FOREIGN DIRECT INVESTMENT, FOREIGN FIRMS, FOREIGN GOODS, FOREIGN OWNERSHIP, FREE TRADE, GDP, GENERAL EQUILIBRIUM MODEL, GOOD INVESTMENT CLIMATE, IMPACT OF TRADE, IMPACT OF TRADE LIBERALIZATION, IMPERFECT COMPETITION, IMPORT DUTIES, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDUSTRIAL SECTOR, INPUT-OUTPUT TABLES, INTERMEDIATE GOODS, INTERMEDIATE INPUTS, INTERNATIONAL DEVELOPMENT, INTERNATIONAL TRADE, INVESTMENT LIBERALIZATION, MARGINAL COST, MARGINAL COSTS, MARGINAL REVENUE, MARKET ACCESS, MARKET ECONOMY, MARKET POWER, MARKET PRICES, MONOPOLISTIC COMPETITION, MONOPOLY, MULTINATIONAL FIRMS, MUTUAL FUND, NATIONAL OUTPUT, NONDISCRIMINATORY BARRIERS, OWNERSHIP SHARES, PRICE TAKERS, PRIMARY FACTORS, PRIMARY FACTORS OF PRODUCTION, PRODUCT DIFFERENTIATION, PRODUCTION FUNCTION, PRODUCTIVITY, PRODUCTIVITY INCREASES, PROFITABILITY, REAL EXCHANGE RATE, REDUCTION IN TARIFFS, REGULATORY BARRIERS, SALES, SERVICES MARKETS, SPREAD, SUBSTITUTE, SUBSTITUTES, SUPPLIERS, SUPPLY CURVES, SURPLUS, TARIFF BARRIERS, TARIFF RATE, TARIFF RATES, TARIFF REDUCTION, TAX RATES, TELECOMMUNICATION, TELECOMMUNICATIONS, TELEPHONE SERVICES, TERMS OF TRADE, TRADE LIBERALIZATION, TRADE MODELS, TRADE REGIME, UNSKILLED LABOR, VALUE OF IMPORTS, WAGES, WELFARE GAINS, WESTERN EUROPE, WORLD MARKET, WORLD MARKETS, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO, ZERO PROFITS, ZERO TARIFF,
Online Access:	http://documents.worldbank.org/curated/en/2006/09/7071193/regional-impacts-russias-accession-world-trade-organization https://hdl.handle.net/10986/9304
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