Ersado, LireMilanovic, Branko2012-05-242012-05-242008-11https://hdl.handle.net/10986/6348Using 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.CC BY 3.0 IGOACCESS TO CREDITADVANCED COUNTRIESANNUAL INFLATIONAVERAGE INCOMEAVERAGE RATEAVERAGE SHAREBANKING SYSTEMBUSINESS ENVIRONMENTCAPITAL MARKETCHILD ALLOWANCESCOMPARATIVE ECONOMICSCOMPETITION POLICYCONSUMER PRICE INDEXCOUNTRY CHARACTERISTICSCOUNTRY DUMMIESCOUNTRY DUMMYCOUNTRY EFFECTSCOUNTRY FIXED EFFECTSCROSS-COUNTRY STUDIESDEMOCRACIESDEMOCRACYDISPOSABLE INCOMEDISPOSABLE INCOME INEQUALITYDISTRIBUTION OF INCOMEDISTRIBUTIONAL CHANGESEARNINGSEARNINGS INEQUALITYECONOMETRIC ANALYSISECONOMIC GROWTHECONOMIC ORDERECONOMIC POLICYECONOMIC REFORMEMPIRICAL ANALYSISEMPIRICAL EVIDENCEEMPIRICAL STUDIESEQUAL COUNTRIESEXCHANGE RATEEXCHANGE SYSTEMEXPENDITUREEXPLANATORY VARIABLEEXPLANATORY VARIABLESEXPORTSFINANCIAL INSTITUTIONSFINANCIAL LIBERALIZATIONFOREIGN EXCHANGEFOREIGN TRADEGDPGDP PER CAPITAGINI COEFFICIENTGLOBALIZATIONGOVERNMENT EXPENDITURESGOVERNMENT OWNERSHIPGOVERNMENT POLICIESGRADUAL INCREASEGROWTH ACCELERATIONGROWTH PROCESSGROWTH RATESHETEROSKEDASTICITYHIGH GROWTHHIGH INFLATIONHOUSEHOLD SURVEY DATAHOUSEHOLD SURVEYSIMPACT OF INEQUALITYINCOMEINCOME DECLINEINCOME DISTRIBUTIONINCOME GROUPINCOME GROUPSINCOME INEQUALITYINCOME SHAREINCOME SHARESINCOME STUDYINCOMESINCREASED INEQUALITYINCREASING INEQUALITYINEQUALITYINEQUALITY DATAINEQUALITY EFFECTINEQUALITY ESTIMATESINEQUALITY INDEXINEQUALITY OBSERVATIONSINFLATION RATEINTEREST RATEINTERNATIONAL BANKLABOR FORCELABOR MARKETSLIBERALIZATIONLOW INCOMEMACROECONOMIC POLICIESMACROECONOMIC STABILIZATIONMARKET ECONOMIESMARKET ECONOMYMEAN INCOMESMIDDLE-INCOME COUNTRIESMINIMUM LEVELNATURAL RESOURCENATURAL RESOURCESNEGATIVE COEFFICIENTSNEGATIVE EFFECTNEGATIVE GROWTHNEGATIVE IMPACT0 HYPOTHESISOBSERVED INCREASEOUTPUTPARTICULAR COUNTRIESPENSIONSPOLICY IMPLICATIONSPOLICY RESEARCHPOLICY VARIABLESPOLITICAL ECONOMYPRIVATE SECTORPRIVATIZATIONPUBLIC SECTORRAPID INCREASEREAL GDPREAL GROWTHREAL GROWTH RATEREAL INCOMEREDISTRIBUTION POLICIESSECURITIESSECURITIES MARKETSSIGNIFICANT EFFECTSIGNIFICANT IMPACTSIGNIFICANT NEGATIVESOCIAL ASSISTANCESOCIAL TRANSFERSSOFT BUDGET CONSTRAINTSSTRUCTURAL CHANGETELECOMMUNICATIONSTRADE LIBERALIZATIONTRANSITION COUNTRIESTRANSITION ECONOMIESTRANSITION ECONOMYUNEMPLOYMENTUNEMPLOYMENT BENEFITSUNEMPLOYMENT RATEUNIONWAGE INEQUALITYWAGESWEALTHWORLD DEVELOPMENT INDICATORSWORLD MARKETSWorld Bank10.1596/1813-9450-4780