Romania : high rising inequalities over two decades of post-communist transformation

Abstract

In Romania, during the post-communist transition, inequality increased tremendously. While, in 1990, the value of the Gini coefficient placed this country at the level of Sweden, by 2007 Romania had become the most unequal country in Europe according to the same coefficient. Although Romania was an egalitarian country under communism, it was characterized by equality at a very low level of income and the population was generally poor and impoverished. Today, the country displays high levels of inequality while incomes continue to remain very low. The recent history of GDP growth can generally be described as having an up and down pattern. Economic recession started in the mid 1980s, became established and became further aggravated during the first years of transition. The year 1991 registered a record low of a 12 per cent contraction in economic output. The economy slowly started to recover in 1993 and a relative stabilization was noticeable, but only for four years. The output expansion was reversed by renewed economic turmoil in 1997 and 1998. In 2000, a new period of economic growth began, which seemed at the time to be on a more robust and sustainable path: in 2008, GDP registered a record high of 9.6 per cent growth. However, the positive