Inequality, Fiscal Capacity and the Political Regime: Lessons from the Post-Communist Transition

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dc.contributor.author Gerry, Christopher en_US
dc.contributor.author Mickiewicz, Tomasz en_US
dc.date.accessioned 2007-10-25T20:10:02Z
dc.date.available 2007-10-25T20:10:02Z
dc.date.issued 2006-07-01 en_US
dc.identifier.other RePEc:wdi:papers:2006-831 en_US
dc.identifier.uri http://hdl.handle.net/2027.42/57211 en_US
dc.description.abstract Using panel data for twenty-seven post-communist economies between 1987-2003, we examine the nexus of relationships between inequality, fiscal capacity (defined as the ability to raise taxes efficiently) and the political regime. Investigating the impact of political reform we find that full political freedom is associated with lower levels of income inequality. Under more oligarchic (authoritarian) regimes, the level of inequality is conditioned by the state’s fiscal capacity. Specifically, oligarchic regimes with more developed fiscal systems are able to defend the prevailing vested interests at a lower cost in terms of social injustice. This empirical finding is consistent with the model developed by Acemoglu (2006). We also find that transition countries undertaking early macroeconomic stabilisation now enjoy lower levels of inequality; we confirm that education fosters equality and the suggestion of Commander et al (1999) that larger countries are prone to higher levels of inequality. en_US
dc.format.extent 315934 bytes
dc.format.extent 1802 bytes
dc.format.mimetype application/pdf
dc.format.mimetype text/plain
dc.relation.ispartofseries 831 en_US
dc.subject Income Inequality, Democracy, Oligarchy, Fiscal Capacity, Economic Reform, Transition en_US
dc.subject.other D31, H21, P26, P35 en_US
dc.title Inequality, Fiscal Capacity and the Political Regime: Lessons from the Post-Communist Transition en_US
dc.type Working Paper en_US
dc.subject.hlbsecondlevel Economics en_US
dc.subject.hlbtoplevel Business en_US
dc.contributor.affiliationum William Davidson Institute en_US
dc.description.bitstreamurl http://deepblue.lib.umich.edu/bitstream/2027.42/57211/1/wp831 .pdf en_US
dc.owningcollname William Davidson Institute (WDI) - Working Papers
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