The Elite Consensus and Regional Economic Development: The Experience of the Republic of Tatarstan

Abstract

In the context of Russia's need to make a transition towards a new developmental model and in light of the international experience suggesting that advanced regions within large economies could become the primary drivers of national growth, this article analyzes the developmental model that has been shaping up in the Republic of Tatarstan (the RT). In Russia, since the mid-2000s, this model has been considered as an example of best practice. We identify the main characteristics and stages in the evolution of the RT developmental model, as well as highlight its strengths and limitations using the SWOT-analysis technique. It is noted that a ”special” investment climate has formed in the region, featuring predictable government policies, lower costs and risks of doing business, and informal guarantees for entrepreneurs willing to invest in the RT's priority projects. The article points out that consolidation of interests of major regional elite groups, their consensus regarding the priorities for regional development and the associated policy instruments have been important comparative advantages of Tatarstan. The prospects for formation in the RT of a catching-up developmental model similar to ones in the successful countries of Southeast Asia will depend upon the extent to which the current Tatarstan's elite could find a consolidated response to the new challenges confronting the RT recently, as well as the degree of soundness of the federal policy with respect to the more developed regions. The main obstacles to development include the current closed ownership structure of core assets, limiting possibilities of market entry for new players, and lower average wages prejudging the outflow of skilled personnel from the RT. In the environment of tightening regional competition for federal resources Tatarstan would have to make additional efforts in order to strengthen its competitive position in the eyes of the Federal Government. In this regard, expanding cooperation with the neighboring regions looks like an attractive policy option for the RT.