Classification of Subjects of the Russian Federation by the Level of Socio-Economic Development

Abstract:

The existing differentiation of subjects of the Russian Federation based on the level of socio-economic development leads to some subjects of the Russian Federation being subsidized at the expense of other subjects, which results in repression of economic development of not only subjects-donors, but of the whole country as well. Therefore, the government policy on subjects of the Russian Federation should be focused not on an automatic reduction of the inequalities in the fiscal capacities, but on the maximum use of their potential. In view of this, it seems important to identify the factors affecting the development of spatial economics with account taken of specific traits of various groups of subjects of the Russian Federation. The cluster analysis allowed for three groups of subjects of the Russian Federation: leading, main and laggard. Examination of correlation coefficients in every group has shown considerable variation of basket of factors, i.e. there are various mechanisms of formation of gross regional product (GRP) in transition from one cluster to another. The regression modeling performed with consideration of subject's belonging to one of the three clusters formed shows that the best results in socio-economic development can be achieved if values are approximate to those registered in regions described in the first cluster.

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