# **1 Introduction**<sup>**2**</sup>

It is generally believed that owing to the legacy of the past there is a strong preference for income equality and redistributive state spending in post-socialist countries. Indeed a large body of literature points in this direction (see Table 1). Yet countries in Eastern Europe and the former Soviet Union which are the focus of this paper are very diverse. In the decade and a half since the end of the Soviet Union income inequality has increased everywhere but has risen far more in some countries than in others. At one end of the spectrum, EU member-state Hungary remains among the world’s most equal countries. Its Gini coefficient for consumption in 2002 was 0.25. At the other of the spectrum, Georgia has become more unequal in terms of the distribution of income than the United States. Its Gini coefficient for consumption in 2003 was 0.39 (World Bank, 2005). If there is a strong preference for more equal outcomes owing to a ‘socialist legacy’, why do we observe highly unequal outcomes in countries such as Georgia? Do other factors, such as weak capacity to administer redistributive social programs, get in the way of implementing a broader social preference for more equal outcomes? Or is the ‘socialist legacy’ itself a myth, there being no social or political consensus in favor of greater equality in countries such as Georgia despite the history of socialism?

Existing literature does not provide much guidance on these questions as it largely focuses on countries in Eastern Europe with little or no coverage of the former Soviet Union (outside of Russia) where some of the more unequal outcomes are observed. This paper attempts to address this gap in the literature by examining data from the _World Values Survey_ which includes a large number of countries from both Eastern Europe and the former Soviet Union. The survey, which has been conducted in several rounds since the late 1980s, seeks people’s _views_ on a number of issues, including income inequality and the role of the state. We use the responses to examine whether there are systematic differences in professed views between post-socialist countries and others, but also within post-socialist countries between Eastern Europe and the former Soviet Union and whether these differences have evolved over time. In conducting our investigation we do our best to ‘control’ for personal characteristics of the respondent such as age, gender, income group, labor market status and other factors, as well as societal characteristics such as per-capita income and overall levels of inequality in the country which may influence declared attitudes.

The paper focuses on three questions in particular. The first is, how do attitudes towards income equality and the role of the state differ between post-socialist countries and other countries in the world? Is there ‘a socialist legacy’ in the sense of a stronger preference for equality in Eastern Europe and the former Soviet Union than elsewhere? This question essentially revisits the earlier literature using data from a wider group of countries than in previous studies. Our results show that Eastern Europe and the former Soviet Union are a diverse group with little robust statistical evidence that _as a group_ they display a greater preference for equality than other countries. There is a strong preference for equality in

> 2 This paper was developed with support from the Chief Economist’s office of the ECA Region of the World Bank.  We are grateful for helpful comments and suggestions on earlier drafts from Asad Alam, Giacomo Corneo, Marianne Fay, Ronald Inglehart, Christine Lipsmeyer, Marcelo Selowsky, and Salman Zaidi.  Any errors of interpretation are ours alone.

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