Economic Transformation and Income Distribution: Some Evidence from the Baltic Countries

Peter K. Cornelius and Beatrice Weder di Mauro
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Peter K. Cornelius: International Monetary Fund

IMF Staff Papers, 1996, vol. 43, issue 3, 587-604

Abstract: The transition from a centrally planned to a market economy implies a massive reallocation of resources. The realignment of relative prices that is needed to achieve this may bring about important distributional effects. This paper examines the extent to which income differentials have changed in countries where bold reforms have been introduced. Discussing the experience in the Baltic states, it finds that recorded income differentials in these countries appear to have widened markedly largely as a result of an increase in the dispersion of earnings. The redistributive effects of social assistance and tax policies seem to have been only marginal.

JEL-codes: D31 P21 (search for similar items in EconPapers)
Date: 1996
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