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Economic Transformation and Income Distribution: Some Evidence From the Baltic Countries

Author

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  • Ms. Beatrice Weder
  • Mr. Peter Cornelius

Abstract

A transition from a centrally planned to a market economy implies a massive reallocation of resources requiring realignments in relative prices, which may have important distributional effects. This paper examines the extent to which income differentials have changed in countries where bold reforms have been introduced. Discussing the experience in the Baltic states, it finds that—largely due to a significant increase in the dispersion of earnings—recorded income differentials in these countries have widened markedly and that the redistributive effects of social assistance and tax policies have been only marginal.

Suggested Citation

  • Ms. Beatrice Weder & Mr. Peter Cornelius, 1996. "Economic Transformation and Income Distribution: Some Evidence From the Baltic Countries," IMF Working Papers 1996/014, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1996/014
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=2001
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    Cited by:

    1. Handa, Sudhanshu & King, Damien, 1997. "Structural adjustment policies, income distribution and poverty: A review of the jamaican experience," World Development, Elsevier, vol. 25(6), pages 915-930, June.
    2. Hayo, Bernd, 2004. "Public support for creating a market economy in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 720-744, December.
    3. Ferdaus Hossain & Helen Jensen, 1999. "Economic reform and inequality: evidence from Lithuania," Applied Economics Letters, Taylor & Francis Journals, vol. 6(8), pages 491-495.
    4. Keane, Michael & Prasad, Eswar, 2001. "Consumption and Income Inequality During the Transition to a Market Economy: Poland, 1985–1992," MPRA Paper 54356, University Library of Munich, Germany.
    5. Karsten Staehr, 2016. "Public Finances and Fiscal Policy in the Baltic States 1991–2015," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 8(1).

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