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Income Inequality In Macedonia: Mechanisms And Solutions

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  • Dragan Tevdovski

    (Ss. Cyril and Methodius University in Skopje, Faculty of Economics – Skopje)

Abstract

The rising income inequalities are one of the most important structural reasons of the global economic crisis. We focus on the income inequality in the country with highest Gini coefficient in Europe – Republic of Macedonia. We argue that there are two main drivers of income inequality in the country: installed neo-liberalism and political patronage system. Neo-liberalism is used as a tool to remove the legislative protection of the workers, to maintain the wages on the miserable low level and to block the redistribution of income from the elites towards the others in the society. The completely opposite system of political patronage and populism is used as a tool of governance. It is based on state related benefits targeted to different groups of citizens and designed to be distributed in small portions and in turns in order to gradually increase the serfdom of the majority of the population from the elites. As a result, the country currently has the highest income inequality in Europe, accompanied by increase of poverty. The article concludes with suggestion of five directions for policy reforms.

Suggested Citation

  • Dragan Tevdovski, 2015. "Income Inequality In Macedonia: Mechanisms And Solutions," Journal Articles, Center For Economic Analyses, pages 57-66, December.
    • Handle: RePEc:cmk:journl:y:2015:p:57-66
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    File URL: http://journal.cea.org.mk/files/journals/1/articles/35/public/35-138-1-PB.pdf
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    References listed on IDEAS

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    1. Blomström, Magnus & Kokko, Ari, 2003. "The Economics of Foreign Direct Investment Incentives," EIJS Working Paper Series 168, Stockholm School of Economics, The European Institute of Japanese Studies.
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    Cited by:

    1. Dimitar NIKOLOSKI & Miroslav GVEROSKI, 2017. "Assessing the poverty-growth-inequality nexus: the case of Macedonia," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 29-43, June.
    2. Viktor Stojkoski & Sonja Mitikj & Marija Trpkova-Nestorovska & Dragan Tevdovski, 2023. "Income Mobility and Mixing in North Macedonia," Papers 2309.17268, arXiv.org, revised Oct 2023.

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    More about this item

    Keywords

    income inequality; neo-liberalism; political patronage; economic policy;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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