1. Democracy, Governance, and Inequality: Evidence from the Russian Regions.
- Author
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Remington, Thomas F.
- Subjects
- *
DEMOCRACY , *DEMOCRATIZATION , *AUTHORITARIANISM ,RUSSIAN politics & government, 1991- - Abstract
Much recent research demonstrates that the structural conflict between the propertied and the poor in non-communist authoritarian states affects the likelihood, timing, and outcome of democratization. In highly unequal societies, democratization has a strongly redistributive effect.The effect of transition in postcommunist democracies was quite different. Given the absence of private property in most means of production, the deliberate policies of wage compression, the widespread availability of income-support mechanisms, and the importance of collective consumption funds in such social goods and services as housing, healthcare, education, transportation, cultural goods and recreation, both income and consumption differentials were narrow compared with democratic capitalist societies at similar development levels. The transition, therefore, brought substantial increases in aggregate income inequality to the post-communist countries, with some post-communist countries reaching levels higher than those of some West European countries.Much political economy literature suggests that democratization is expected to make government more responsive to wider segments of society, more inclined to supply universal collective goods and services such as security of person and property, health care, education, and infra-structure, as well as to provide some minimum level of social insurance against the hazards of catastrophic income loss. These public goods and services should foster productive behavior on the part of economic agents, and thus growth, as well as the mitigation of extremes of poverty and inequality.However, collusion in rent-extraction by post-transition elites might be consistent with high rates of economic growth under some circumstances. If the elites take advantage of the new institutional environment of a post-communist state and capture control over productive assets for themselves, they might well use them to increase their own incomes, yielding rapid aggregate growth the benefits of which are concentrated in a narrow elite. The institutional advantages of democratization and property rights might be restricted to those holding monopolies over property, and not broadly shared. Their policies would lead to higher growth rates after an initial period of disorganization was overcome. But the benefits of the growth would be distributed unequally. An oligarchic democracy would complement an oligarchic form of capitalism. This paper examines the effects of the dual political and economic transition on income inequality trends, taking Russia's subnational regions (the subjects of the federation) as the units of observation. Noting that the regions differed widely both in their starting conditions and in the increase in income growth and differentiation as a consequence of the transition, it seeks to identify the political mechanisms that explain variation in income and inequality growth following the transition. Using both direct and instrumental measures of democracy by region, the paper finds evidence consistent with the "oligarchic democracy" model. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]
- Published
- 2008