Equality, Participation, Transition: Essays in Honour of Branko Horvat

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Taiwan vs. 1.5 per cent in Uruguay. Another indicator of the high dispersal of assets in Taiwan is the proportion of stock-owning population, which at 27 per cent is twice as large as in most West European countries and about the same as in the United States. One possible explanation of the lower (than predicted) inequality in Asia may then lie in a more equal distribution of physical and human capital. The former is extremely difficult to approximate; the latter can be approximated by the spread and depth of education. I introduce (equation 6) the average number of school years completed by the population 25 years of age or older (EDUC). 27 However, because of strong collinearity between education and income, no new insight is obtained. These two variables can be used practically as substitutes. The introduction of education renders both INCOME terms statistically insignificant. Moreover, EDUC does not reduce the downward deviation of GINI observed in Asian countries (not shown here). Education, therefore, does not provide an independent explanation (that is, an explanation that is different from what is implied by income) for the lower inequality in Asia. 28 We are left with the alternative of introducing a dummy variable for Asian countries (equation 7). This improves the fit and eliminates the systematic negative residuals for the Asian countries (Figure 4.3b). All the coefficients, including those of both INCOME terms, are statistically significant at less than 1 per cent level. The dummy variable has the expected negative sign and is highly significant: Asian countries have, all other elements being the same, an income inequality that is some 8.2 Gini points less than that of non-Asian countries. This, of course, is not an entirely satisfactory conclusion because we are unable to explain what real factors lie behind the observed lower inequality in Asia. 4.4.4 What explains the differences in inequality? Branko Milanović 61 On the basis of these results we can find the causes for the difference in the levels of inequality between the five groups of countries. OECD countries are used as a yardstick and the difference in GINI between them and the other groups is explained by the differences in social choice variables (state-sector employment and transfers), ‘given’ variable (income level), and an Asia dummy. I use regression 7 for the calculations. The results are displayed in Table 4.3. In the case of Latin America, Asia and Africa, the main reasons for greater inequality, in comparison with OECD countries, are lower transfers (which explain between 8.4 and 9.4 additional Gini points) and lower income (which explains between 6.2 and 7.3 additional Gini points). These two
Table 4.2 The regressions: dependent variable GINI (except in equation 1B: quintile ratio) Regressions No. of countries Constant STATE TRANS INCOME INCOME 2 DUMMY EDUC R ¯ 2 (F) SE (DW) 1.0 80 97.08 – – 39.80** – – – 0.70 6.449 (0.11) 0.223** 0.416** (0.009) 2.608** – – (46.4) (1.99) (0.000) (0.002) (0.006) – 1 (White 80 97.08 – – 39.80* 2.608* – – 0.70 6.449 correction) (0.21) 0.223 ** 0.416** (0.035) (0.020) (46.4) (1.99) (0.000) (0.000) – – 1A (Deininger 70 146.7* – 0.292 48.16** – – – 0.41 7.994 Squire data) (0.04) 0.214** (0.070) (0.006) 2.941** – – (13.1) (1.81) (0.000) – (0.006) 1B (quintile 70 126.2* – 0.116 34.07** – – – 0.23 5.431 ratio) (0.01) 0.010** (0.240) (0.009) 2.059** – – (6.0) (1.8) (0.000) – (0.01) 2 (without 69 113.2 – – 44.13* 2.888* – – 0.63 6.779 socialist) (0.16) 0.288** 0.343** (0.024) (0.013) – – (27.9) (2.02) (0.004) (0.002) 3 (socialist 80 100.3 – – 40.66* 2.671* 2.949 – 0.69 6.479 dummy) (0.20) 0.185** 0.423** (0.032) (0.018) (0.413) – (36.9) (1.98) (0.000) (0.000) 4 (only cash 72 128.0 – – 46.39* 2.957* – – 0.74 6.03 transfers) (0.13) 0.235** 0.470** (0.02) (0.01) – – (51.7) (1.98) (0.000) (0.000) 62
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Equality, Participation, Transition
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First published in Great Britain 20
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vi Contents 9 Self-Management, Empl
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List of Figures 02.1 First Law of O
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x Foreword institution most dear to
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Notes on the Contributors Ivo Bića
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xiv Notes on the Contributors membe
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xvi Notes on the Contributors done
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xviii Notes on the Contributors pri
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Introduction: Branko Horvat - Beyon
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xxii Introduction Dame (1978), Univ
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xxiv Introduction theory led him to
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xxvi Introduction though friendly,
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xxviii Introduction The second pape
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xxx Introduction disciplines such a
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Branko Horvat: Select Bibliography
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xxxiv Branko Horvat: Select Bibliog
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xxxvi Branko Horvat: Select Bibliog
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xxxviii Branko Horvat: Select Bibli
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2 Horvat’s Contributions to Econo
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Page 49 and 50: 10 Horvat’s Contributions to Econ
Page 55 and 56: 2 Individual Initiative, Entry and
Page 67 and 68: 28 Egalitarianism On Its Own Thomas
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Page 71 and 72: 32 Egalitarianism On Its Own absenc
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Page 77 and 78: 38 Egalitarianism On Its Own 100% 9
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Page 85 and 86: 46 Egalitarianism On Its Own Eckel,
Page 87 and 88: 4 Determinants of Cross-Country Inc
Page 89 and 90: 50 Determinants of Income Inequalit
Page 95 and 96: 56 GINI GINI 65 60 55 50 45 40 35 3
Page 99: 60 Determinants of Income Inequalit
Page 119 and 120: 5 Illyrian Theories of Cooperative
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Page 137 and 138: EMPLOYEE RETURN ONLY PROFIT PROFIT
Page 139 and 140: 100 Employee Participation in Enter
Page 141 and 142: 7 Employee Involvement and the Mode
Page 143 and 144: 104 Employee Involvement and the Mo
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112 Employee Involvement and the Mo
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8 Uneasy Symbiosis of a Market Econ
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120 Market Socialism in Yugoslavia
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146 Self-Management, Employee Owner
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Table 9.1 Methods of privatization
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10 Privatization and Enterprise Per
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164 Privatization: Evidence from Es
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11 Growth Theory and Transition Eco
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186 Growth Theory and Transition Ec
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202 Index economic growth - continu
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204 Index Horvat, Branko - continue
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206 Index neoclassical economics -
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208 Index ‘third way’, 88, 104
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Equality, Participation, Transition: Essays in Honour of Branko Horvat

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