Speed and Sequencing of Transition Reforms and Income Inequality: A Panel Data Analysis

Abstract

An extensive literature has analyzed the economic effects of transition patterns in Central and Eastern European and former Soviet Union countries. With few recent exceptions, analysis of the impacts of speed and sequencing of reforms has not concerned the dynamics of income inequality. In this paper we analyze the heterogeneous effects of transition reforms on inequality by explicitly considering their speed and sequencing. To this aim we identify eight transition models in which the 27 countries considered are classified. The dynamic panel‐data analysis for the period 1989–2009 reveals that balanced transition patterns, which favored a coordination of reforms especially in specific fields, were relatively less pro‐inequality.