The Russian doll of sustainability framework is applied to find income inequality determinants in transition countries. Land endowment effects on institutions and economic outcomes are analysed using the auto-regressive distributed lag approach on ten Central and Eastern European countries from 1995 to 2021. Findings suggest that land endowment has an income inequality-widening effect, and trade openness reduces inequalities, but various democracy measures have different effects on inequality, also, depending on the time horizon: while participatory democracy increases inequality, egalitarian democracy decreases it, but a more rural-biased public service provision is associated with higher inequality in the short run and decreased inequality in the long run. Lastly, we do not confirm a robust Kuznets curve over the development path, and we do not find financial development statistically significant in explaining income inequality.
Authors: Anna Auza, José Alberto Fuinhas
June 2023, The Singapore Economic Review
DOI: 10.1142/S0217590823500376
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