Equity-Efficiency Preferences in Poland and the Soviet Union: Order-Reversals under the Atkinson Index.

In this paper, the relation between inequality and welfare index "reversals" is characterized. By the identification of these reversals, upper and lower bounds are established for Atkinson's parameter of inequality aversion. This exercise shows that a level of inequality aversion high enough to show welfare improving over the "egalitarian decline" of 1978-81 in Poland is too high to show improvement over the "elitist growth" of 1981-86 in the Soviet Union. However, even if the lower bound of inequality aversion is assumed, plausible projections on Soviet growth and distribution still show social welfare. Copyright 1991 by The International Association for Research in Income and Wealth.