Government Economic Policy and the Formation of the Investment Climate: The Experience of Russia in the Late Nineteenth - Early Twentieth Centuries

Abstract

n this study the authors assess the impact of the state economic policy on the formation of investment climate in Russia in the late XIX — early XX century. The attention is focused on such measures as: stimulation of the economic growth through the industrialization, public finances strengthening, expansion of transport infrastructure, stabilization of the ruble, and protectionist tariff policy. Based on comparative analysis of different methodologies of assessing the investment climate the authors identified the most important factors and indicators for assessing the investment climate at the country level, which were then adapted to the task of the study, taking into consideration the specificity of the investigated period. Five hypotheses regarding the impact of the economic policy, pursued in the years 1885-1913, on the investment climate in Russia were formulated. The hypotheses were tested by means of econometric analysis using multiple regression models. The regression results were interpreted taking into account the realities of the investigated period. The authors come to the conclusion that the economic policy, pursued during the investigated period, was quite effective and contributed to the formation of a relatively favorable investment climate.