Regional Convergence or Polarization: The Case of the Russian Federation

We analyse growth patterns of the Russian federal subjects, and test if all regions converge to a common growth path, or if there are many convergence clubs by using the data on regional GDP per capita for the 1996–2017 period. Our analysis shows that there are four different convergence clubs in the Russian Federation, and there is no geographical concentration of the clubs. The regions with dynamic population movements are likely to be in high-income clubs, and they attract more people. Most of the national republics are included in low-income clubs, and, after controlling for other factors, we find that the North Caucasian republics are likely to be members of low-income clubs, whereas there is not much difference between other republics and regions. The persistence of income differences across convergence clubs is a cause of concern for long term sustainable growth and stability.