Redistribution under state socialism: A USSR and PRC comparison

Abstract

In the last four decades, important theoretical arguments have been developed to explain patterns of redistribution and social inequality under state socialism. Building on this literature, we compare and contrast patterns of redistribution in the two largest state socialist societies — the USSR and the PRC — on the eve of their transitions from state socialism. Our main goal is to link the theoretical ideas in the literature with the empirical evidence and to provide a systematic examination of the multiple channels of redistribution of economic resources (income and housing) in these two societies. Our findings show that high-rank officials have a significant and larger share of redistributive benefits. High-rank professionals appear to receive similar benefits. There is little differentiation in redistributive benefits among other occupational groups. Redistribution based on economic sectors is less salient and often not statistically discernible. Returns to education and work experience vary considerably across these two societal contexts, raising questions about their relevance to the principles of state socialist redistribution.