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Attitudes to Income Equality: The ‘Socialist Legacy’ Revisited

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Abstract

It is routinely assumed that residents of post-socialist countries have a preference for greater income equality, other things being equal, owing to the legacy of socialism. This proposition is examined in the context of Eastern Europe and the former Soviet Union (FSU) using three waves of the World Values Survey. Contrary to expectations, there is little evidence of a ‘socialist legacy’ en bloc. Countries in the FSU as a group display significantly lower preference for moving towards greater income equality than Eastern Europe. Moreover, this preference for greater income inequality appears to have persisted at least since the mid-1990s.

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Notes

  1. A more comprehensive survey of the literature is provided in the working paper version of this article.

  2. In their robustness test where they use all available data for ‘ex-communist countries’, Chong and Gradstein (2006) do not distinguish Eastern Europe from other ex-communist countries.

  3. The surveys are conducted by the Inter-university Consortium for Political and Social Research based at the University of Michigan. A detailed description of the survey method and instrument may be found in Inglehart et al. (2004). Data from the most recent wave 2005–2007 are not available at this time.

  4. Other questions are discussed in the final section of the paper.

  5. The results (coefficient estimates) of ordered probit models do not lend themselves to a straightforward interpretation, unless one calculates the marginal effects for specific outcomes. In the case of Table 3 (Columns 3 and 4), the results suggest that the probability of a maximum outcome (preference for equality equal to 10) is about 10% higher in CEE (relative to the CIS). Alternatively, one could create a dummy variable for the highest possible outcome and run an OLS using the same specification in Table 3 (Columns 3 and 4) to generate a linear probability model for the maximum outcome. The coefficient estimate indicates that preference for equality is about 6% higher in CEE (relative to the CIS).

  6. We thank Giacomo Corneo for this suggestion.

  7. See also Ravallion and Lokshin (2000).

  8. As suggested by an anonymous referee, people may accept prevailing patterns as normal and their attitudes reflect these patterns. Controlling for the extent of redistribution using total government expenditure (as a proxy for the extent of actual redistribution) is one way of assessing this possibility. Clearly, this is an imperfect proxy, but data limitations prevent us from using a more appropriate measure. To the extent that government spending reflects people's preferences, the inclusion of such a variable also introduces new statistical problems such as reverse causality. We consider these additional empirical exercises as primarily illustrative of the general robustness of our findings.

  9. See, for example, Perotti (1996).

  10. We thank an anonymous referee for raising this point.

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Acknowledgements

This paper was developed with support from the Chief Economist's office of the Europe and Central Asia Region of the World Bank. We are grateful for helpful comments and suggestions on earlier drafts from Asad Alam, Josef Brada, Giacomo Corneo, Marianne Fay, Ronald Inglehart, Christine Lipsmeyer, Marcelo Selowsky, Salman Zaidi, and two anonymous referees. Any errors of interpretation are ours alone.

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APPENDIX

APPENDIX

See Tables A1, A2 and A3

Table a1 Countries in the benchmark regression sample by survey wavea
Table a2 Preference for equality (ordered probit): 1990–1993 and 1995–1997
Table a3 Preference for equality and the tunnel effect (ordered probit): 1995–1997

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Murthi, M., Tiongson, E. Attitudes to Income Equality: The ‘Socialist Legacy’ Revisited. Comp Econ Stud 51, 344–366 (2009). https://doi.org/10.1057/ces.2009.4

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