3 even worse, oppose) the state/party could resort. Many ministers realized precariousness of their position when loss of job entailed eviction from the house, end of a chauffeur-driven limo and resumption of queuing for food. On a less grand scale, many workers became party members and attended endless boring meetings in order to qualify for enterprise-provided housing or subsidized vacation.

Health care and education. Health care was almost entirely socialized and free (a few countries had some private practice). It was financed from general revenues. The services were widely available, particularly when measured in terms of the usual indicators (doctors or beds per capita), but bad organization, wrong incentives (e.g. to prolong the stay of the patients in hospitals in order collect more money from the insurance), and demoralized personnel (doctors were uniformly badly paid) made services to be of low quality and queuing widespread. Inadequate preventive care, insufficient dissemination of information on healthy living etc. led to stagnation or even declines in life expectancy (in Romania and the USSR) even before the onset of the GDP declines.

Education was also entirely socialized and practically free (there were small fees for some university courses and textbooks). Private schools were not allowed. Only Church, as in Poland, could run some limited educational facilities (unrelated to clergy). Measured in terms of standard indicators, educational achievements were considerable even if below those of Western countries. However, the mismatch between the type of education produced and needs of modern economy was great. Even those people who had skills needed in a modern economy could not be used efficiently by enterprises that remained mired in the old ways of doing business. Low returns to education further depressed any incentive to acquire and productively use the education.

Inequality and poverty. Socialist countries exhibited relatively low levels of inequality.° Measured inequality was, on average, at the low end of inequality found in OECD countries—comparable to that in Scandinavia. Even if adjusted for some flaws in household surveys from which these data were derived® and for privileged consumption in kind enjoyed by the elite, inequality still remained very modest.’ Furthermore, if consumption of the privileged were to be taken into account, other subsidies—most of them for food and other essentials—should be included as well. This would invariably reduce income inequality because of low income elasticity of the most heavily subsidized goods.’ Fragmentary data on housing

*Except for the former Yugoslavia and China. In case of Yugoslavia, higher inequality compared to other socialist economies was due to wide inter-regional differences in average income. ‘They include omission of the very poor, and the top "nomenklatura", creating the bias—particularly present in Soviet surveys—toward the “average” income or consumption.

"Elite privileges were exaggerated both by the population (because of the secrecy in which privileges were held) and by too credulous Western analysts. In effect, as anybody who has visited vacation homes previously kept strictly "off-limits" for all but the top Party brass can testify, their level of comfort and service is below an average Holiday Inn. *For the results for Poland see World Bank (1989); for Hungary, Kupa and Fajth (1990, p. 37); for Czechoslovakia, World Bank (1991, p. 59). The most pro-poor were, obviously, food subsidies; the least, transportation and culture.