published sources about China in order to assess whether rising inequality in the latter portends the future of the former set of countries. Section VII concludes with implications for policy and areas for further research.

# **II. INCREASING INEQUALITY IN TRANSITION: WHAT DO WE ACTUALLY KNOW?**

Table 1, based on most widely used published data, suggests that all the countries in Eastern Europe and the former Soviet Union experienced an increase in inequality. However, despite an apparently common legacy, countries witnessed very different degrees of increased inequality. On the one hand, as already seen in the example of Russia, a rapid increase in inequality occurred in the middle-income and low-income CIS countries, followed by some moderation. On the other hand, as the example of Poland at least till the middle of the 1990s illustrates, the new member states of the European Union (the EU-8), appear to have experienced a more gradual but steady increase in inequality. Table 1 makes clear that, by the early 2000s, the region exhibited the full spectrum of inequality outcomes, ranging from fairly unequal to fairly equal distributions of income.

**<u>Table 1.  Gini indices for per capita incomes from “official” sources</u>**

||**1987-**<br>**1990**|**1991 **|**1992 **|**1993**|**1994 **|**1995**|**1996**|**1997**|**1998**|**1999**|**2000**|**2001 **|**2002 **|**2003**|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Armenia|0.269|||||||||0.570||0.537||0.428|
|Azerbaijan|0.345|||||0.440||||||0.373|||
|Belarus|0.233||||0.280|0.253|0.244|0.249|0.253|0.235|0.247|0.245|0.246|0.249|
|Bulgaria|0.245||0.344||0.340|0.384|0.357|0.366|0.345|0.326|0.332|0.333|0.370|0.351|
|Croatia|0.251||||||||0.333|||||0.29*|
|Czech Rep|0.197||0.228||0.270||0.258|0.230|0.239|0.212|0.232|0.231|0.237|0.234|
|Estonia|0.240||0.395||0.350||0.370|0.361|0.354|0.361|0.389|0.385|0.393|0.402|
|Georgia|0.313|||||||0.430||||||0.469|
|Hungary|0.214|||0.231||0.242|0.246|0.254|0.250|0.253|0.259|0.272|0.267|0.268|
|Kazakhstan|0.297||||0.330||0.35||||||||
|Kyrgyz Rep.|0.308|||0.353||||0.470|0.411|0.399|0.414|0.377|0.382|0.342|
|Latvia|0.240||||0.310|||0.326|0.321||0.327||0.358|0.379|
|Lithuania|0.248||||0.350||0.347|0.309|0.332|0.343|0.355|0.354|0.357|0.318|
|Macedonia|0.349||||||0.369|0.367|||||0.34*|0.34*|
|Moldova|0.267|||0.365|0.360|||0.420|||0.437|0.435|0.436|0.411|
|**Poland**|**0.255**|**0.265**|**0.274**|**0.285**||**0.320**|**0.328**|**0.334**|**0.326**|**0.334**|**0.345**|**0.341**|**0.353**|**0.356**|
|Romania|0.232||||0.290|0.312|0.302|0.305|0.298|0.299|0.310|0.353|0.349|0.352|
|**Russia**|**0.259**|**0.260**|**0.289**|**0.398**|**0.409**|**0.381**|**0.375**|**0.381**|**0.398**|**0.399**|**0.394**|**0.396**|**0.398**|**0.404**|
|Slovenia|0.220|0.227|0.282||0.250||0.302|0.305|0.298|0.299|0.310|0.353|0.22*|0.22*|
|Slovak Rep.|0.186||||||0.237|0.249|0.262|0.249|0.264|0.263|0.267|0.299|
|Tajikistan|0.334|||||||||0.470|||||
|Turkmenistan|0.308||||0.360||||||||||
|Ukraine|0.240|||||||||0.282|0.288|0.290|0.277|0.271|
|Uzbekistan|0.351||||0.330||||||||||

Source: Data from UNICEF TRANSMONEE 2005 edition [www.unicef-icdc.org/research], except for selected countries and years form ECAPOV I, Milanovic (1997), Poverty Assessments for Aremnia, Georgia, Uzbekistan, Ukraine, Tajikistan, and Eurostat (2005). Note: For Russia 1992 and earlier years data refer to total incomes, for later years – only to Money incomes;* data are form Eurostat and rely on a OECD per equivalent equivalence scale.

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