A Political Economy Perspective on Redistribution and Growth in Transition

Keane, Michael and Prasad, Eswar (2001): A Political Economy Perspective on Redistribution and Growth in Transition. Published in: Inequality and Growth: Theory and Policy Implications, MIT Press (June 2003)

Abstract

Poland undertook a rapid and decisive set of political and economic reforms starting in 1989-90, a period that has become known as the big bang. A widely held view is that, in all of the transition economies, the economic upheaval associated with the process of transition has led to substantial increases in inequality, thereby complicating the process of reform. In this paper, we use micro data from the Polish Household Budget Surveys (HBS) to show that the increase in overall income inequality in Poland during the transition was actually quite modest. Our analysis indicates that social transfers played an important role in attenuating the rise in overall income inequality and, by extension, in maintaining the social and political cohesion that was essential for the reform process.

• Item Type: MPRA Paper
• Language: English
• Keywords: economics of transition, inequality, growth, Poland
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H53 - Government Expenditures and Welfare Programs; H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; P - Economic Systems > P2 - Socialist Systems and Transitional Economies; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P26 - Political Economy ; Property Rights; P - Economic Systems > P3 - Socialist Institutions and Their Transitions

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