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

Author

Listed:
  • James K. Galbraith
  • Ludmila Krytynskaia
  • Qifei Wang

Abstract

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.

Suggested Citation

  • James K. Galbraith & Ludmila Krytynskaia & Qifei Wang, 2004. "The Experience of Rising Inequality in Russia and China during the Transition," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(1), pages 87-106, June.
  • Handle: RePEc:liu:liucej:v:1:y:2004:i:1:p:87-106
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    References listed on IDEAS

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    1. 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.
    2. Wei, Shang-Jin & Wu, Yi, 2001. "Globalization and Inequality: Evidence from within China," CEPR Discussion Papers 3088, C.E.P.R. Discussion Papers.
    3. 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.
    4. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    5. 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.
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    Citations

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    Cited by:

    1. Gluschenko, Konstantin, 2010. "Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia," MPRA Paper 66824, University Library of Munich, Germany.
    2. James Galbraith & Sara Hsu & Wenjie Zhang, 2009. "Beijing Bubble, Beijing Bust: Inequality, Trade, and Capital Inflow into China," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 38(2), pages 3-26.
    3. James Galbraith, 2009. "Inequality, unemployment and growth: New measures for old controversies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(2), pages 189-206, June.
    4. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    5. H. Lehmann & M. G. Silvagni, 2013. "Is There Convergence of Russia’s Regions? Exploring the Empirical Evidence: 1995 – 2010," Working Papers wp901, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. Yuriy Gorodnichenko & Klara Sabirianova Peter & Dmitriy Stolyarov, 2010. "Inequality and Volatility Moderation in Russia: Evidence from Micro-Level Panel Data on Consumption and Income," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 209-237, January.
    7. repec:spr:eurpop:v:33:y:2017:i:5:d:10.1007_s10680-017-9451-3 is not listed on IDEAS
    8. Stanislav Kolenikov & Anthony Shorrocks, 2005. "A Decomposition Analysis of Regional Poverty in Russia," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 25-46, February.
    9. Saccone Donatella, 2011. "Potenze economiche emergenti: Cina e India a confronto.Istruzione e diseguaglianze," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201113, University of Turin.
    10. Galbraith, James K., 2007. "Global inequality and global macroeconomics," Journal of Policy Modeling, Elsevier, vol. 29(4), pages 587-607.
    11. Tullio Buccellato & Tomasz Marek Mickiewicz, 2007. "Oil and gas: a blessing for few hydrocarbons and within-region inequality in Russia," UCL SSEES Economics and Business working paper series 80, UCL School of Slavonic and East European Studies (SSEES), revised Feb 2008.
    12. Olena Nizalova, 2014. "Inequality in Total Returns to Work in Ukraine: Taking A Closer Look at Workplace (Dis)amenities," Discussion Papers 52, Kyiv School of Economics.
    13. Kenneth Smith, 2007. "Determinants of Soviet Household Income," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(1), pages 3-24, June.

    More about this item

    Keywords

    Inequality; Russia; China; Provinces; Sectors;

    JEL classification:

    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • D39 - Microeconomics - - Distribution - - - Other
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access

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