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The Experience of Rising Inequality in Russia and China during the Transition

  • James K. Galbraith
  • Ludmila Krytynskaia
  • Qifei Wang
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    This paper examines the changes in regional and sectoral inequality that accompanied economic transformation in Russia and China throughout the 1990s. The experiences of the two countries are widely viewed as having been polar opposites. While the Soviet collapse had adverse consequences for many parts of the post-Soviet population, the Chinese experience produced a continuing rise of average living standards. Nevertheless, both countries experienced a drastic increase in economic inequality. In both cases, regional inequalities rose more sharply than inequalities across sectors but within regions. In particular, major urban centers gained dramatically relative to the hinterlands. Also, in Russia as in China, those sectors exercising the largest degrees of monopoly power gained the most (or lost the least) in relative terms. In both countries, the respective position of finance improved greatly, while that of agriculture declined. The decline of agriculture in China, however, was not as precipitous as in Russia, and certain sectors, such as education and science, maintained their position in China in a way that was not possible for them in Russia.

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    File URL: http://eaces.liuc.it/18242979200401/182429792004010104.pdf
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    Article provided by Cattaneo University (LIUC) in its journal The European Journal of Comparative Economics.

    Volume (Year): 1 (2004)
    Issue (Month): 1 (June)
    Pages: 87-106

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    Handle: RePEc:liu:liucej:v:1:y:2004:i:1:p:87-106
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    1. Wu, Ximing & Perloff, Jeffrey M., 2004. "China's Income Distribution Over Time: Reasons for Rising Inequality," Institute for Research on Labor and Employment, Working Paper Series qt9jw2v939, Institute of Industrial Relations, UC Berkeley.
    2. Mikheeva Nadezhda, 1999. "Differentiation of Social and Economic Situation in the Russian Regions and Problems of Regional Policy," EERC Working Paper Series 99-09e, EERC Research Network, Russia and CIS.
    3. Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics.
    4. Shang-Jin Wei & Yi Wu, 2001. "Globalization and Inequality: Evidence from Within China," NBER Working Papers 8611, National Bureau of Economic Research, Inc.
    5. Kislitsyna Olga, 2003. "Income Inequality in Russia during Transition: How Can it be Explained?," EERC Working Paper Series 03-08e, EERC Research Network, Russia and CIS.
    6. Keith Griffin & Azizur Rahman Khan & Carl Riskin, 1999. "Income Distribution in Urban China during the Period of Economic Reform and Globalization," American Economic Review, American Economic Association, vol. 89(2), pages 296-300, May.
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