Social inequality is a major issue that affects the economic, social and democratic performance and stability of post-Communist Central and Eastern Europe and as a result has a significant bearing on Europe as a whole. The main contribution of the proposed project, therefore, will in the creation of new knowledge and the development of mechanisms for its dissemination that will augment the capacity of national governments and the European Union to understand and reduce social inequalities.
The international economic competitiveness of nations clearly depends on a number of factors. Moreover, there appears to be no single successful way of organising a competitive national economy, even in an age of globalisation. However, particularly in Europe and even more particularly in post-Communist Eastern Europe, social inequality may be connected with prospects for economic competitiveness and development. If this is the case, reducing social inequality may have a significant impact on the economic development of states, with positive benefits for their economic and political partners.
The debate about the determinants of economic growth and competitiveness is clearly extensive and not yet wholly resolved. However, a number of the most theoretically and empirically founded hypotheses about economic competitiveness - (i) market liberalisation, (ii) trade openness, and (iii) development of high levels of cultural capital among citizens - also have significant implications and connections with the issue of social inequality.
- higher levels of social inequality may affect the willingness of political elites to pursue rigorous and full market reform agendas, and create greater obstacles to building support for such reforms in society
- economic integration - which brings with it access to advanced technology and capital - particularly in Europe, entails convergence on regulated market systems and democratic institutions which is only possible if elites and citizens support reforms
- social inequality may be in part a product of inequalities in the cultural capital of individuals, who tend to sustain such differences because they reproduce economic behaviours that relate to their existing cultural resources
Societal problems, of course, can be construed very broadly to include economic and political issues (discussed above and below). We choose here to concentrate on the processes by which social inequality may lead to lack of social cohesion and social conflict, as follows:
- social inequality results from and produces group differentiation - by occupational class, cultural and citizenship status, gender, race, religion etc
- group differentiation may be intensified by the absence of possibilities for social mobility
- social groups, particularly when these become attached to strong group identities, are likely to define themselves by social distance from other out-groups
- this has the effect of reducing social cohesion
- lack of social cohesion can be politically highly problematic in various ways (including to democratic and welfare systems), particularly when the economic pie shrinks or when there are further efforts to shift the division of resources across groups that are seen as illegitimate
- these problems may be particularly intense in CEE states where inequality is linked to ethnicity and citizenship
- at worst, group differentiation, lack of social cohesion and group grievances can spill over into open social conflict and violence - this may be particularly likely or severe depending on elite levels politics
There is considerable evidence of potential links between social inequality and democratisation and democratic consolidation and political conflict avoidance, as follows:
- social inequality may produce social unrest that can in some cases lead to democratisation
- democracy may have an impact on levels of social inequality
- once democracies have been established, significant social inequality may operate to make democracies less manageable, effective and stable
- differing institutional arrangements within democracies create varying political opportunities that make social inequality more or less destabilising
In post-Communist Central and Eastern Europe, therefore, social inequality may have a powerful impact on the political prospects of undemocratic (Belarus), marginally democratic (Russia), democratising (Ukraine) as well as other states in the process of democratic consolidation.