Reform and Inequality During the Transition : An Analysis Using Panel Household Survey Data, 1990-2005

Using for the first time household survey data from 26 post-Communist countries, covering the period 1990-2005, this paper examines correlates of unprecedented increases in inequality registered by most of the economies. The analysis shows, after controlling for country fixed effects and type of survey used, that economic reform is strongly negatively associated with the income share of the bottom decile, and positively with the income shares of the top two deciles. However, breaking economic reform into its component parts, the picture is more nuanced. Large-scale privatization and infrastructure reform (mostly consisting of privatization and higher fees) are responsible for the pro-inequality effect; small-scale privatization tends to raise the income shares of the bottom deciles. Acceleration in growth is also pro-rich. But democratization is strongly pro-poor, as is lower inflation. Somewhat surprisingly, the analysis finds no evidence that greater government spending as share of gross domestic income reduces inequality.

Bibliographic Details

Main Authors:	Milanovic, Branko, Ersado, Lire
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2008-11
Subjects:	ACCESS TO CREDIT, ADVANCED COUNTRIES, ANNUAL INFLATION, AVERAGE INCOME, AVERAGE RATE, AVERAGE SHARE, BANKING SYSTEM, BUSINESS ENVIRONMENT, CAPITAL MARKET, CHILD ALLOWANCES, COMPARATIVE ECONOMICS, COMPETITION POLICY, CONSUMER PRICE INDEX, COUNTRY CHARACTERISTICS, COUNTRY DUMMIES, COUNTRY DUMMY, COUNTRY EFFECTS, COUNTRY FIXED EFFECTS, CROSS-COUNTRY STUDIES, DEMOCRACIES, DEMOCRACY, DISPOSABLE INCOME, DISPOSABLE INCOME INEQUALITY, DISTRIBUTION OF INCOME, DISTRIBUTIONAL CHANGES, EARNINGS, EARNINGS INEQUALITY, ECONOMETRIC ANALYSIS, ECONOMIC GROWTH, ECONOMIC ORDER, ECONOMIC POLICY, ECONOMIC REFORM, EMPIRICAL ANALYSIS, EMPIRICAL EVIDENCE, EMPIRICAL STUDIES, EQUAL COUNTRIES, EXCHANGE RATE, EXCHANGE SYSTEM, EXPENDITURE, EXPLANATORY VARIABLE, EXPLANATORY VARIABLES, EXPORTS, FINANCIAL INSTITUTIONS, FINANCIAL LIBERALIZATION, FOREIGN EXCHANGE, FOREIGN TRADE, GDP, GDP PER CAPITA, GINI COEFFICIENT, GLOBALIZATION, GOVERNMENT EXPENDITURES, GOVERNMENT OWNERSHIP, GOVERNMENT POLICIES, GRADUAL INCREASE, GROWTH ACCELERATION, GROWTH PROCESS, GROWTH RATES, HETEROSKEDASTICITY, HIGH GROWTH, HIGH INFLATION, HOUSEHOLD SURVEY DATA, HOUSEHOLD SURVEYS, IMPACT OF INEQUALITY, INCOME, INCOME DECLINE, INCOME DISTRIBUTION, INCOME GROUP, INCOME GROUPS, INCOME INEQUALITY, INCOME SHARE, INCOME SHARES, INCOME STUDY, INCOMES, INCREASED INEQUALITY, INCREASING INEQUALITY, INEQUALITY, INEQUALITY DATA, INEQUALITY EFFECT, INEQUALITY ESTIMATES, INEQUALITY INDEX, INEQUALITY OBSERVATIONS, INFLATION RATE, INTEREST RATE, INTERNATIONAL BANK, LABOR FORCE, LABOR MARKETS, LIBERALIZATION, LOW INCOME, MACROECONOMIC POLICIES, MACROECONOMIC STABILIZATION, MARKET ECONOMIES, MARKET ECONOMY, MEAN INCOMES, MIDDLE-INCOME COUNTRIES, MINIMUM LEVEL, NATURAL RESOURCE, NATURAL RESOURCES, NEGATIVE COEFFICIENTS, NEGATIVE EFFECT, NEGATIVE GROWTH, NEGATIVE IMPACT, 0 HYPOTHESIS, OBSERVED INCREASE, OUTPUT, PARTICULAR COUNTRIES, PENSIONS, POLICY IMPLICATIONS, POLICY RESEARCH, POLICY VARIABLES, POLITICAL ECONOMY, PRIVATE SECTOR, PRIVATIZATION, PUBLIC SECTOR, RAPID INCREASE, REAL GDP, REAL GROWTH, REAL GROWTH RATE, REAL INCOME, REDISTRIBUTION POLICIES, SECURITIES, SECURITIES MARKETS, SIGNIFICANT EFFECT, SIGNIFICANT IMPACT, SIGNIFICANT NEGATIVE, SOCIAL ASSISTANCE, SOCIAL TRANSFERS, SOFT BUDGET CONSTRAINTS, STRUCTURAL CHANGE, TELECOMMUNICATIONS, TRADE LIBERALIZATION, TRANSITION COUNTRIES, TRANSITION ECONOMIES, TRANSITION ECONOMY, UNEMPLOYMENT, UNEMPLOYMENT BENEFITS, UNEMPLOYMENT RATE, UNION, WAGE INEQUALITY, WAGES, WEALTH, WORLD DEVELOPMENT INDICATORS, WORLD MARKETS,
Online Access:	http://documents.worldbank.org/curated/en/2008/11/10021497/reform-inequality-during-transition-analysis-using-panel-household-survey-data-1990-2005 http://hdl.handle.net/10986/6348
Tags:	Add Tag No Tags, Be the first to tag this record!