Income, Inequality, and Poverty During the Transition from Planned to Market Economy

This is a book about income, inequality, and poverty during the remarkable period of collapse of Communism and the “construction” of capitalism in eighteen formerly socialist countries. It covers a period of almost ten years, from the time of the early Gorbachevian reforms of 1987-88 to approximately 1996. The book was made possible by two almost simultaneous revolutions that took place in the late 1980s. The first, of course, was the collapse of Communism. The second was the opening up of information on income, inequality, and poverty, even in countries (such as the former Soviet Union) where for the better part of the last seventy years such information had been treated as a state secret.

This is indeed a period of great turmoil — comparable with the period that followed both World Wars. It is the period of dramatic declines in income, the reappearance of diseases long forgotten, growing poverty and unemployment, and great uncertainty. But it is also a period when great fortunes are being made, consumer goods of incomparably better quality are becoming available for many, and people have the opportunity to control and radically alter their lives. Unlike during some previous episodes of turmoil, we now have relatively reliable and up-to-date information that allows us to follow and analyze the developments. The goal of this book is precisely this: to describe what happened during the transition in eighteen countries — from the Czech Republic in the West to Kazakhstan and Russia in the East. Specifically, the book will examine what happened to the real incomes of the population, to the inequality with which incomes and expenditures are distributed, and to poverty. It will also attempt to find out why these changes occurred.

Link: Income, Inequality, and Poverty During the Transition from Planned to Market Economy (PDF—full book)