Income Inequality and Poverty Dynamics in Poland and East- Germany before and under Transition

One goal of the economic transition in Eastern Europe is a long term increase of the national income. In order to realize this aim, it is necessary to give people free access to economic opportunities, which are complimentary to the political freedom and the chance for everybody to participate in the democratic political process. It seems to be obvious that the restructuring of the Eastern Europe economies will increase the inequality of earning and income. Many people believe that this is a necessary incentive to stimulate profit-oriented market behavior. The inequality should not, however, increase too much, because a moderate inequality is an aim by itslef. On the other hand, there is a broad consensus that poverty should be avoided. What has actually happened to income inequality and poverty under transition is still the question to be discussed.