Inequality, Transfers and Growth: New Evidence From the Economic Transition in Poland
IMF Working Papers, June 1, 2000
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- Inequality, Transfers and Growth: New Evidence From the Economic Transition in Poland
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Bibliographic details
- Authors: Eswar S Prasad, Michael P. Keane
- Published: June 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451854008.001
Key findings
- Income and consumption inequality declined in 1990-92 and rose only moderately above pre-transition levels by 1997.
- Inequality in labor earnings increased markedly and consistently during 1990-97.
- Social transfer mechanisms, including pensions, mitigated increases in overall inequality and poverty.
- Transfer mechanisms were well-designed to reduce political resistance to market-oriented reforms in the early years of transition, facilitating rapid growth.
- Cross-country evidence from transition economies is consistent with this interpretation.
- Recent literature cited in the paper suggests that inequality-reducing redistribution can enhance growth.
Data, scope, and methods (as described)
- Focus on Poland during the economic transition period, with specific time references to 1990-92, 1990-97, and 1997.
- Addresses multiple concepts: income, consumption, labor earnings, social transfers, poverty, and political economy of reform.
Policy implications and interpretation
- Well-targeted social transfers (including pensions) can both protect welfare and reduce political opposition to market reforms.
- Redistribution that reduces inequality can be compatible with, and may support, rapid economic growth during transition.
Content in this bundle
- Inequality, Transfers and Growth: New Evidence from the Economic Transition in Poland: WP/00/117