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