Economic Differentiation of Municipalities of the Russian Arctic and their Receptivity to Federal Preferential Treatment

Abstract

The modern Arctic policy of Russia focuses on the Arctic Zone of the Russian Federation (AZRF) as a single macroregion. However, since the Russian Arctic is internally heterogeneous, a common Arctic policy can either increase or decrease the differentiation of municipalities. Therefore, to improve federal spatial policy, it is necessary to assess the differentiation of Arctic municipalities and their receptivity to federal support measures for investors. To this end, the study proposes a new indicator, namely, the share of social and other benefits to the population in the sum of social benefits and taxable income of individuals and individual entrepreneurs. Unlike traditional wage indicators, the proposed indicator adequately reflects the income of the population and is not distorted by territorial price differences. This indicator for the AZRF varies from 5 % in municipalities with accelerated gas production to more than 50 % in peripheral areas. A reduced share of social benefits is typical for agglomerations of regional capitals, industrially developed municipalities or important seaports. The receptivity of municipalities to federal preferential treatment is analysed based on the author’s processing of resident registers (distribution of residents by Arctic municipalities). According to the results, investors are primarily attracted to the largest urban agglomerations of the European Russian Arctic (about half of residents of the Russian Arctic are in Arkhangelsk and Murmansk agglomerations), while the impact of preferential treatment on peripheral municipalities is minimal or non-existent (there were no residents of the Russian Arctic in approximately 20 percent of municipalities in three years). Such a situation will increase the imbalance in economic development of Arctic municipalities, therefore, state policy should provide various measures to support different municipalities, which should be substantiated in further research.