The role of the oil sector in the development process of the former Soviet Union

The purpose of this research is threefold: first, to review what role Western theorists argue mineral exports play in the development of an open, market-oriented, economy, e.g., what positive and negative macroeconomic linkage effects are generated; second, to analyze the role of petroleum exports in the economy of the Soviet Union, and to compare and contrast the Soviet experience with Western theory; and third, to look at how the movement toward a more open and market-oriented economy, given its large petroleum exports, may also generate macroeconomic "side-effects" in the Russian Federation. In conclusion, what policies the new government might pursue to avoid negative or to enhance positive "spill-over" effects are discussed. In an effort to evaluate the linkage effects generated by the expansion of the Soviet oil industry, given the scarcity of available detailed information, aggregate sectoral trends are analyzed to demonstrate changes in economic activity.