Chapter

The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe

Sergei Guriev and Andrei Rachinsky

in Personal Wealth from a Global Perspective

Published in print October 2008 | ISBN: 9780199548880
Published online January 2009 | e-ISBN: 9780191720765 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199548880.003.0007

Series: WIDER Studies in Development Economics

The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe

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This study discusses the evolution of personal wealth in transition economies. While data availability is still a problem, the available indirect evidence suggests privatization has resulted in an increase in personal wealth but also in personal wealth inequality, especially in the countries that lagged behind in building effective institutions. Another source of wealth inequality is the high income inequality that is due to wage decompression coupled with the low saving rates among the poor. This chapter pays special attention to one of the most noticeable implications of this rise in personal wealth and wealth inequality—the emergence of so‐called oligarchs. Using the comprehensive dataset of Muscovites' incomes, it shows that surveys that do not take into account the first- and second‐tier rich (billionaires and millionaires) may drastically underestimate inequality.

Keywords: inequality; wealth distribution; oligarchs; privatization

Chapter.  6749 words.  Illustrated.

Subjects: Economic Development and Growth

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