Institutional Quality and Income Inequality: Evidence from Post-Soviet Countries

Abstract

This paper focuses on identifying the relationship between institutional quality and income inequality in chosen post-Soviet countries during the period 2002-2017. Using panel analysis is found a nonmonotonic relationship between institutional quality and income inequality. Increasing institutional quality is associated with growing income inequality, but only to a certain extent; from a certain level, higher institutional quality leads to a reduction in income inequality. The growing institutional quality leads to a deepening of income inequality between the richest social class compared to the poorest and middle class. Role in this process plays a particular regulatory quality, which - as it seems - favors the upper 20%.