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Regional poverty disparity and economic performance in Central and Eastern Europe and Eurasia

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  • Christina Peters
  • Ron Sprout
  • Robyn Melzig

Abstract

While most of the inequality literature focuses on income inequalities by Gini coefficient, this article develops an alternative index that measures the extent of poverty disparities across geographical regions. In contrast to trends in income inequalities, there is little evidence that regional poverty disparities have peaked and are falling in Central and Eastern Europe and Eurasia. Using panel data for the transition countries, we find that high levels of regional poverty disparity have a positive impact on macroeconomic performance. Further evidence suggests this result may be driven by the positive effect of disparities on both saving and the pace of economic reforms. However, it appears that disparities are beneficial to progress on both economic and democratic reforms only for countries with per capita income levels above USD3000.

Suggested Citation

  • Christina Peters & Ron Sprout & Robyn Melzig, 2010. "Regional poverty disparity and economic performance in Central and Eastern Europe and Eurasia," Post-Communist Economies, Taylor & Francis Journals, vol. 22(3), pages 345-365.
    • Handle: RePEc:taf:pocoec:v:22:y:2010:i:3:p:345-365
    DOI: 10.1080/14631377.2010.498684
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    References listed on IDEAS

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    1. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
    2. Kitty Stewart, 2002. "Measuring Well-Being and Exclusion in Europes Regions," CASE Papers case53, Centre for Analysis of Social Exclusion, LSE.
    3. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
    4. Stewart, Kitty, 2002. "Measuring well-being and exclusion in Europe's regions," LSE Research Online Documents on Economics 6395, London School of Economics and Political Science, LSE Library.
    5. Kitty Stewart, 2002. "Measuring Well-Being and Exclusion in Europe s Regions," LIS Working papers 303, LIS Cross-National Data Center in Luxembourg.
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    1. Jitka Bartošová & Tomáš Želinský, 2013. "The extent of poverty in the Czech and Slovak Republics 15 years after the split," Post-Communist Economies, Taylor & Francis Journals, vol. 25(1), pages 119-131, March.

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