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Varieties of capitalisms and varieties of performances: accounting for inequality in post-Soviet Union transition economies

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  • Gianluca Grimalda
  • David Barlow
  • Elena Meschi

Abstract

We partition post-Soviet Union Transition Economies into two groups: European Union New Member States and countries belonging to the Commonwealth of Independent States or the South Eastern Europe area. Both groups started the 1980s with low levels of inequality, but in the early 2000s the latter group reached a level of inequality seven percentage points higher. We review various factors of inequality and examine whether these had differential effects in the two groups. Foreign Direct Investments and trade flows with the EU had a bigger inequality-enhancing effect in New Member States. We interpret this as evidence of technological catching-up and productivity improvements taking place in this region. Other specific reforms, such as privatisation and price liberalisation, had similarly strong effects in the two groups. We also find some evidence of an inequality-decreasing effect of an indicator of Voice and Accountability in countries outside the EU, and that countries with higher government effectiveness experienced lower levels of inequality. This supports the relevance of institutional capacity in tackling inequality. Finally, we speculate over the effects of the current global crisis on future economic performance.

Suggested Citation

  • Gianluca Grimalda & David Barlow & Elena Meschi, 2010. "Varieties of capitalisms and varieties of performances: accounting for inequality in post-Soviet Union transition economies," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 379-403.
    • Handle: RePEc:taf:irapec:v:24:y:2010:i:3:p:379-403
    DOI: 10.1080/02692171003701602
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    3. Hebatalla Rezk & Goma Amer & Nahla Fathi & Sizhong Sun, 2022. "The impact of FDI on income inequality in Egypt," Economic Change and Restructuring, Springer, vol. 55(3), pages 2011-2030, August.
    4. M. Brzeziński & B. Jancewicz & Natalia Letki, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Poland," GINI Country Reports poland, AIAS, Amsterdam Institute for Advanced Labour Studies.
    5. Cevik, Serhan & Jalles, João Tovar, 2023. "For whom the bell tolls: Climate change and income inequality," Energy Policy, Elsevier, vol. 174(C).
    6. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    7. repec:agr:journl:v:2(602):y:2015:i:2(602):p:23-42 is not listed on IDEAS
    8. Sara ROSE & Crina VIJU, 2014. "Income inequality in post-communist Central and Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 5, pages 5-20, June.
    9. Chiara Franco & Elisa Gerussi, 2013. "Trade, foreign direct investments (FDI) and income inequality: Empirical evidence from transition countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(8), pages 1131-1160, December.
    10. Serafini, Giovanni O. & Szamosi, Leslie T., 2015. "Five star hotels of a Multinational Enterprise in countries of the transitional periphery: A case study in human resources management," International Business Review, Elsevier, vol. 24(6), pages 972-983.
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