Post-colonial trade between Russia and former Soviet republics: back to big brother?

3 Factors behind the potential trade persistence of the Soviet ties
In this paper, we are testing whether post-Soviet Russian-other CIS+ sibling ties 
broadly conform to the usual post-colonial pattern of gradual decline, led by rising 
relative trade costs between former colonizer and its colonies. However, no group 
of countries is identical to any other, and we therefore need to take careful account 
of other factors—monadic and dyadic—which might affect the dynamics of trade 
change, given the mass geography of the region.
3.1 Monadic factors
3.1.1 Patterns of GDP
We would like to start with some key concepts. Trade volumes react to changes 
both in trade costs and in economic activity. Studies of the erosion of post-colonial 
ties (such as HMR 
2010
) normalize for changes in economic activity by utilizing a 
gravity framework, which eliminates the effect of GDP changes. We need to bear in 
mind that the recovery in trade volumes between Russia and CIS+ siblings will, in 
part, be responding to the recovery in economic output of the two regions between 
1998 and 2008, in turn reflecting a global commodities boom and a bounce-back 
from the initial disruption of the Soviet breakup.
We note that GDP growth, when it occurs in both the exporter and importer coun-
tries, has a compounded effect on bilateral trade volumes. For example, if we use 
the simpler format in Eq. (
2
), where the elasticity of trade volume with respect to 
both exporter and importer countries is set at 1, then if GDP of both halves (which 
is not a bad approximation of the post-Soviet collapse) then we might expect trade 
between the two countries to fall by 75%, while if exporter and importer GDPs sub-
sequently double again, bilateral trade will quadruple.
10
 Since gyrations of GDP in 
the post-Soviet era have been extreme, we would expect to have to correct for these 
large compounded effects, before we can actually start working out what is happen-
ing to post-colonial trade bias.
(10)
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ikt
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10
This crude calculation needs qualifying where the rest of the World is also growing, as multilateral 
resistance terms will change. However, the gyrations in the post-Soviet economies since 1991 have been 
dramatic compared to the rest of the World, and so we would expect even larger swings in trade between 
them.
Economic Change and Restructuring (2021) 54:877–918
890

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