russian elite2

7/21/2019 Russian Elite2

1/31

The First Shall Be Last? Entrepreneurship and Communist Cadres in the Transition fromSocialismAuthor(s): Akos Rona-TasReviewed work(s):Source: American Journal of Sociology, Vol. 100, No. 1 (Jul., 1994), pp. 40-69Published by: The University of Chicago PressStable URL: http://www.jstor.org/stable/2782537.

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2/31

The

First Shall Be Last? Entrepreneurship

and

Communist

Cadres

in

the Transition

from Socialism1

Akos

Rona-Tas

University f California,

an

Diego

This article eviews he

ociological iteraturen the ransitionrom

socialism to

capitalism.

t

distinguishes

etween

the

erosion and

transition hases

and

between raditional nd corporate egments

in the emerging rivate ector.Panel surveydata fromHungary

show

thatduring

he

transitionx-communistadresmaintain heir

advantageousposition nd do

especiallywell

in

the

moredynamic

corporate egment.They are successful ecause human

capital

is

importantn both capitalism

nd socialism nd because the cadres

are

able

to convert

past political

power

to

economic

advantage.

Contrary

o the

findings

f studiesbased

only

on

agriculture,

he

transitionncreases ncome

nequalities.

The transition rom socialistto a capitalist conomy s a large-scale

transformationngineered

rom

bove,

in

which ocialist ountriesmove

theirbureaucratically

oordinated conomies oward a market

model.

This

transition equires profound

hange

n

property

elations nd a

new set of economic nstitutions

o form

private

ector.

n

turn,

hese

changes

reate

new economic lite nd redistribute

roperty

nd mate-

rial well-being.

n this

process,

ome

people gain wealth,

others ose

it;

some see their ncomes

grow,

while others ee a markeddeterioration

n

their

arningpower.

1

This articlewouldnothave beenpossiblewithout hegenerosityf Tamas Kolosi,

who provided he survey ata and

gave advice and many uggestions

n the course

ofwritinghis rticle. he paper lsobenefitedromnsightsnd criticismrom 6zsef

Borocz,JuanDiez Medrano,BarbaraGeddes,MarthaLampland, erenc

Moksony,

VictorNee, Victor erezDiaz, James

Rauch,Susan Shirk, oel obel, van

Szelenyi,

Szonja Szelenyi, arlosWaisman,

Andrew

Walder,

David

Wank,Gergely

imanyi,

and theAJS reviewers.

n

earlier ersion

f

thispaperwas presentedt

the nnual

conferencef heAmerican ociological ssociation

n

1993.

A

largepart

f hework

wascompleted hile he uthorwas a fellow t theJuanMarch nstitute

or

Advanced

Studies

n the

SocialSciences

n

Madrid.Correspondence aybe addressed

o

Akos

R6na-Tas,Departmentf Sociology,

niversityf California, an Diego,

9500 Gil-

manDrive,La Jolla,California 2093.

?

1994by

The

University

f

Chicago.

All

rights eserved.

0002-9602/95/10001-0002$01

50

40 AJS Volume 100 Number

1

(July 1994):

40-69

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3/31

Transition rom ocialism

This article iscusses nd critiques he

growing iteraturen thesocial

consequences

f the

transition

rom ocialism. t

develops

the distinction

between he erosionofsocialism,whenonlytraditional mall-scalepri-

vate enterprisean exist, nd the transition

rom ocialism,whichbrings

the novelty

f modern

privatecorporate ntrepreneurship.

use

panel

survey

data from

Hungary

to

investigate

wo related but analytically

distinctssues,therecruitment

f

entrepreneurs

n

the private ector nd

the distributional

onsequences

f the transition. he

evidence uggests

that,

while the transition ften

disposed

of the top layersof the old

political lite

n

a

spectacularmanner,

ommunist adres

have

not lost

theirdvantageous conomic ositionsntheprocess.Cadresquickly ook

advantage

of

thenew

corporate egment

f

the

private

ector s

entrepre-

neurs.This development as increased ncome nequality, s those

who

hadmore nitially ained

more han hosewho started ut with ess.

THEORIES OF

TRANSITION FROM SOCIALISM

The Changing

Elite Thesis

In

the sociological iterature,

esearchers raw two

contradictory

onclu-

sions bout whowilltakeadvantageof the newmarketnstitutions,ho

will benefit

mostfrom

hem,

nd as a

consequence,

ow this

nstitutional

change

will transformhe social structure f

postcommunist

ocieties.

One

part

of the

literature

uggests

hat

the

main

beneficiaries f the

transition

ill be those who were

n

less

privileged ositions

when

the

transition

egan.

Those

who

propose

hat he

ransition esults

n

a

major

change

n

the economic

lite

expect

new

group

of

people

to

emerge

s

a

class

of new

entrepreneurs, high

turnover t the

top, and,

as new

advantages

ccrue to

previously nderprivileged

roups,

t least an

ini-

tial decrease n social inequalities.

Szelenyi 1988)

offers

historical

rgument

redicting

he circulation

of economic lites

see

also

Szelenyi

nd

Szelenyi1990).

His

interrupted

embourgeoisementheory

orEastern

Europe

is

supported y

an exten-

sive

study

of

household

farming

n

Hungary. Szelenyi

found that the

amount of land held

by

the

head of

householdor

his

parents

before

the communist akeoverhad a

positive

ssociationwith the

ncome the

household

produced

n

its

privateplot

n

1980 Szelenyi1988, pp. 129-

34). People

most active

n

privatefarming,egalized

and

supported y

the communisttate nHungary rom heearly1960s,were thosewhose

familieswere

already acquainted

with

market

production

n

the mid-

1940s and who could draw on precommunist

emories r a "habitus"

(Bourdieu 1977, pp. 72-95)

of market ulture ransmitted

y their ami-

lies Kovaich 988). He concludes hat

he

emergingmarket

n

agriculture

41



4/31

AmericanJournal f Sociology

is a continuation f a long-term istorical rend, nterruptedy the com-

munist xperiment.

Having had large- r

even

moderate-sizedandholdingswas a serious

liability

n

thefirst ecade of communism,nd the ife hancesof better-

offpeasants,

or

kulaks,

and their hildren

were seriously mpairedby

policies

of

collectivization. hus, household arming

n

the 1980s eemed

to be

a

consolationprizefor

the middle-

and large-holding easantry

mistreated

n

the

earlyyears

of communism.

zelenyi

1988) shows that

the

few

who

became cadres

despite

heir

ackground

were ess

likely o

participate

n

market-oriented

rivate farming. zelenyi'stheory hus

predicts hat new economic litewillemerge rom elow, from group

whosehistorical

scendencewas

aggressivelynterruptedy

four

ecades

of ocialism nd

which

will

now reclaim

ts

elite

position

rom

ommunist

cadres

see

also Konra'd

nd

Szelenyi1991, pp. 348-49).

While

Szelenyi

restricts is empirical nalysis oprivatehousehold arming, e extends

his theory f embourgeoisement

o activities

eyond agricultural mall

production1988, pp. 53-54).

One

of

the curious

findings

f

Szelenyi'swork

is

that, while cadres

were ess

likely o engage

n

household arming, nce theyhad decided

to do it the value of theirproductionwas higher han that of other

farmers

1988, p. 131). Moreover,focusing nly

on

producers ngaged

in

very

ntensive

market

roduction,

e found hat

adreshad an

advan-

tage

in

entering

hat

group

and

also

received a

positive

return

within

that

group

for

being

a

cadre

p. 145).

Observingprivate family

farms

n

China

in

the

1980s,

Nee

(1989,

1991) offers theory

f structural

ompensation

o

explain the market

transition. e formulates

is

theory

n

three heses:

1)

the

market

ower

thesis

ostulates hat,

with

he

emergence

f

the

market,

entral istribu-

torswill losepowerand direct roducerswillhave morediscretion ver

the

erms f

exchange

ftheir

oods

and

services; 2)

themarket ncentive

thesis

claims that

there are

greater

ncentives or

ndividual

effort

n

market

ransactions

han

n

the ocialist

ector,

whichwill result

n

higher

returns

n

education; inally,3)

themarket

pportunity

hesismaintains

that reforms

n

the

direction

f marketization ill create

new

avenues

for

mobility

nd

will

provide

n alternative

o

bureaucratic dvancement

(1989, pp. 666-67;

see

also

Jenkins 990).

Nee assertsthat "the more

complete

he shift

o market

oordination,

he ess

likely

hat

economic

transactions illbe embedded nnetworks ominated y cadres, nd the

more

ikelypower-control

over resources-will be located

in

market

institutionsnd

in

social networks

. . of

privatebuyers

nd sellers"

(1989, p. 668).

Nee derives everal

hypotheses,

ne of

which

predicts

hat

"not

only

are

thedirect ontrollers

fthe

redistributive echanism

ikely

o

experi-

42



5/31

Transition

rom ocialism

ence

a

relative

oss, but the

value of their

political apital

accumulated

through rior

experience s cadre

is

likely

o

diminish

s

well" (1989,

p. 671). Cadres are relatively isadvantaged, s theyhave "little or

no net advantage

in

entering nto private

entrepreneurship"1989, p.

671). Nee presents

vidence hrough

urvey ata forChinesehouseholds

from ujian province.Although

e

admits

hatpoliticalpower

seems to

have utility or

entrepreneurs,

e

claims

that his data supportall his

hypotheses.

In

a later rticle

Nee (1991) extends

his

theory f change

n

the struc-

ture of

power,

ncentives,

nd

opportunities

o include ts

implications

about change n thestructuref outcomes.Nee's underlyingrgument

is that, s previouslyess advantaged

groups

benefit rom he transition,

inequalities

hould not

increase. His markettransition heory nd

its

extension

o economic

nequalities ely

n

the

assumptions

f

compensat-

ing advantages nd of structural

etermination.

The assumption

f compensatingdvantages argues

that the formal

mode of economic

coordination-bureaucratic

r market-determines

the distribution

f

income

across

positions.

Bureaucratic

oordination

will favor

one set of

positions y

rewarding

hem

highly,

while market

coordinationwill favor another et the same way; thesetwo sets are

mutually xclusive,

n

assumption

mplicit

n

Szelenyi's

nterrupted

m-

bourgeoisementheory

s

well.

Thus,

certain

ositions

not

preferred y

bureaucratic oordination

ill

be

better

ompensated

n

the

market

see

also

Manchin

and

Szele'nyi 987).

The

assumption f structural

eterminationontends

hat ndividuals

and households

an

be

fully

escribed

by

the

positions

hat

the

system

of coordination

llocates

for hem.

A

change

n

the

form f

coordination

will

result

n

a change

in the

remuneration f

positions,

because the

transitionmeansthe ntroductionf a new economicprinciplewith ts

own

exclusive

et of

preferred ositions,

none of which

had

been

pre-

ferred

p

until

then.

Changing

he

remunerationf

positions,

n

turn,

means

changing

he remunerationf

individuals

nd

households,

s

no

one can

slip

out

of

his

or herown

position.

t

follows hat ncome

nequal-

ity among

ndividuals nd householdshas

to

decline,at least initially,

because

equality

ncreases

f

thosewho

were

worseoff efore

xperience

gains.2

Nee

(199J)

proceeds

o

show that ince he

beginning

fthetransi-

tion

to a

market conomy

n

China,

income

nequalities

have not

in-

creased, as previous iterature n developingmarket economiessug-

gested.

2

Obviously,

he

equalizing endency

f

giving

o

the

poor people

belowthe

middle

of the ncome istribution)orks nlyup

to a

point, .e., until

he

poor rise above

themiddle y the same amount heywereunder t.

If

thepoorbecome ven richer,

inequalitiesan increase.

43



6/31

American

Journal fSociology

Restatinghis theory,Nee admits

the

importance f the existence f

the

cadre-entrepreneur,

ut he

claims that t is

a resultof

the partial

natureof

the reform nd thusdoes

not

contradict is theory1991, p.

269).

Nee's revised tance on the

cadre-entrepreneurunsthe risk that

his

theory ecomes mmune

o falsification. is

claim that

his theory

should

not

be

testedagainst a

partial reform

aises the question of

whether t is

possible o talk about

market

ransition nlessreforms re

still

ncomplete.Without

urther

pecification,ny findingwill

support

Nee's

theory.

Nee's data

(1989,

1991)

are

less than

convincing

n

several

counts. Household

ncome

s not

a

good

measure

of

inequality, inceit

is heavilydependent n the number f earnersnthehousehold nd thus

also reflects

nequalities

n

household

composition.Household

income

per capita

or household

ncome

per

earnerwould

have been

more

ppro-

priate.Furthermore, ee's data on

householdncome re

reported etro-

spectively.

t is

difficulto

believe

that

accurate

data on

peasanthouse-

hold ncomes an be

gathered

0

years

fter

he fact.3

f

we

discounthis

income

figures

or

1975

and

accept

thosefrom

980

and

1984,

we

see a

small ncrease

n

inequalities

see

also Riskin

1987).

Moreover,

o

sociological heory

ftransitionrom

ocialism o

capital-

ism can rely ntirelynexperiencesfagriculturaletty ommodity ro-

duction. While both

Szelenyi 1988)

and

Nee

(1989, 1991)

build

their

cases on household

arming,

he relevance f

household

arming

hould

be seen

in

the

context

f

ndustrialized

ocieties,

where

private

farming

is

only

one form f

entrepreneurship.

The

Surviving

lite Thesis

In

clear contradictiono the

changing

lite

thesis,

second and

rapidly

growing artof theliterature bservesthat theprimary eneficiaryf

marketization

s

the old elite

Grossman1989;

Oi

1989;

Shirk

1989, p.

340; Stark

1990,p. 389;

Ren

1990,p. 141; Prybyla

991;

Staniszkis

991,

pp. 38-52;

Kolosi

1991;

Alexeev

nd

Gaddy 1991;

Burawoy

nd Krotov

1992,p.

34; McAuley

1992;

Wank

1992;

Rona-Tas

1995).

Even

Szelenyi,

implicitly

ontradicting

is

theory

f

embourgeoisement,

alls

attention

to the socialist

cadres'

ability

o

adapt

to market

nstitutions

Szelenyi

1986-87).

Two sets

of

arguments

ave

been

proposed

for he

survivalof

the old elite.

The argumentftechnocraticontinuityontends hat ocialism evel-

3 Adding

andom ecall rror or

ncome igures or1975 would ncreasemeasured

inequalitiesn thatyear, because

the

variance f incomes

would increaseby the

variance f

the

recall

rror.

alculating

rom hat nflated

ase would

underestimate

the ncreasen

nequality.

44



7/31

Transition

rom ocialism

oped a technocratic

adre that

can

maintain

ts

position

hrough ts ac-

quired expertiseSzalai

1990, p. 182).

This

pragmatic

ew

elite

was

also

instrumental,t least

in

the case

of

Hungary,

n bringing bout the

transition. omparative

tudiesof stratificationhow convincinglyhat

educationplays

an important ole

in

status

allocation

n

both

socialist

and

market

ystemsConnor

1979;

Matras

1980;

Simkus

1981; Zagorski

et al. 1984; Haller

and

Mach

1984; Haller,

Kolosi,

and

Robert

1990;

Blau and Ruan 1990;

Treiman nd Ganzeboom 1990). Under socialism,

bythe1980s cadreship

was

strongly

ied

to education

Wasilewski1985;

Szelenyi 1987;

Li and Bachman

1989;

Wasilewski

1990;

Li and

White

1990), and while n the earlyyears partymembershipnabled some to

receive a tertiaryducation,

n

recentdecades most

people joined

the

party opromote

heir areers

fter

inishing

heir

ormal ducation.

Dis-

puting he ssumption

f

compensatingdvantages,

his

rgument

laims

that here

s a common

meritocratic-technocratic

haracter f both

party

and entrepreneurial

ecruitment

hat

s

the main source of

continuity.

While

one would

expect

shifts

mong

the values of different

ypes

of

education

during

he

transition,

s a

whole, people

withmore ducation

will do

better

n the

newlyforming

market

ector

han those

with

ess,

and thus cadreswill be in an advantageousposition.

The argument

f

power

conversion ffers different roposition.

While

it

agrees

that the new elite

will

differittlefrom he old

one,

it

suggests

nother

process.

The

power conversion

hesis

contends

that

power

ccumulated

uring

tate ocialism s

converted

nto

ssetsof high

value

in

a market

conomy.

taniszkis

uts

forth he

concept

f

"politi-

cal

capitalism"

o

describe

he direct onversion f

communist olitical

power

ntoeconomic

might 1991, p. 46).

She

argues

hat,

n

the process

of

the transition

o a

market

conomy, trategically

ocated

cadres

can

take advantageoftheirpositionsn acquiring tateproperty. hrough

informalhannels, xploiting

he

uncertainties

f

he

ransition,

adres an

turn heir imited ontrol

f state

property

nto

quasi

or

real

ownership.

According

o this argument, adres are at an advantage not ust

in

setting p

but

also

in

operating ompanies,

because

theycan

use

their

personal

networks

o

get

access to

valuable business nformationnd

even to

credit.The

importance

f

personal

ties in

socialist

economies,

bothwithin nd outside

hestate

ector,

s

amply

documentedSampson

1986; Lampland 1987;

Grossman

1977; Markus 1981;

Simis 1982; Nove

1983, p. 78; Walder 1986,p. 181; R6na-Tas 1990,pp. 117-20; Major

1992, p. 83; Borocz 1993a),

but

they ssume special

mportance uring

thetransition

B6rocz

1993b;

Hankiss

1990,p. 255;Prybyla 991,p. 16).

Both

horizontal nd vertical ies

re

mportant

n postcommunistcon-

omies.

Socialist

economies

eave

behind

poor system

f

gathering nd

disseminating

conomic

nformation,

ecause under socialism nforma-

45



8/31

American

Journal f Sociology

tion flow

was

channeled hrough he center nd

horizontal

lowswere

weak (Kornai1989, p. 38; 1992,pp. 127-30). In the developingmarket,

information

bout prices,

demand, or the availability f

goods is still

very ostly oobtain, hus

brokering etween

market egmentss one of

the most

ucrative usinesses

Staniszkis1991,

p. 39; McAuley

1992, p.

98). Much precious nformations

carried hrough

orizontalhannels f

personal onnectionsuring he

transitionOi

1989, p. 213;Wank 1992;

R6na-Tas 1991). Cadres obtained wide

network fconnections

hrough

the

party

rganization,

nd these

onnectionsurvive ven

after he

party

formally eased

to exist.

Verticalties are equally important.All formsof vast institutional

changesgenerate

dditional

ncertainties,

ecause new

rules, he details

of their

mplementation,

nd

their

nintended

onsequences

re difficult

to

anticipate Bunce

and

Csanady 1993).

About

one-third f

the

compa-

nies

n

Hungary

re now

engaged

n

what official

tatisticsabel as "real

estate,rental,

nd services

ssisting

usiness

ctivities."

Having

connec-

tions

n

the state

apparatus

or

local

administration

an

provide

early

knowledge f

new aws and

regulations

nd ofthe

unwrittenules

ftheir

interpretation.

ince

the

personnel

f ministries

nd

local

governments

changes onlyat thetop levels and manyof the low- and middle-level

administrators

tay

n

place,

cadres till

have

privileged

ccess

to

ndivid-

uals

in

the

politicalbureaucracy.

Having

the kindof

connections x-cadreshave is

not a

necessary re-

requisite orprospering

n

all forms

f

enterprise.

unning local shoe-

repair

tore r

even

a chicken arm

equires ertain onnections

ut not

necessarily ith

officials

n

ministries,anks,

or

the

top

echelons

f

state

firms.

Artisans

r

household

armers

might

eed

this

type

of

connection

occasionally,

ut these

can

be

found

hrough

riends f

friends.

On

the

otherhand,startingnd subsequentlyuccessfullyperating n import-

export

businessor a

manufacturinglant requires

onnections

n

high

places,

whichcadres are more

ikely

o have.

The technocratic

ontinuity

rgument

ontests he

assumption f com-

pensating dvantages.

t maintains hat ocialism nd

capitalism

prefer

a set of

common,highly killed,

echnocratic

ositions.

The

power

con-

version hesis

disputes

he

assumption

f structural

etermination.ndi-

viduals

are

not

playthings

f formal

nstitutions;

ather, hey

re

adept

at

finding

heir

way

aroundthem.

In summary, hefour

arguments

ffer

ontradictoryuggestions

n

who becomes an

entrepreneur

nd

who will thrive s an

entrepreneur.

Thus, they

mustarrive t differentonclusions

bout

the

distributional

consequences

of the transition

table 1).

On the issue

of

recruitment,

Szelenyi's 1988)

interruptedmbourgeoisement

heory

nd Nee's

(1989,

1991) theory

f structural

ompensation

uggest

hat cadres will not

be

46



9/31


TABLE

1

DISTRIBUTIONAL CONSEQUENCES OF THE TRANSITION FROM SOCIALISM TO CAPITALISM

Who Has

the

Advantage

Who Will

Key

to

in

Becoming Prosper s

an

Recruitment What Happens

Theory/Thesis an Entrepreneur Entrepreneur and Success to Inequality

Structural

compensation

.. .................

Noncadres Noncadres Education Does not

change

Interrupted

embourgeoisement

............

Noncadres Cadres ?)

Family

...

background

Power conversion .............. ....

Cadres Cadres

Cadre

position

Increases

Technocratic

continuity

....................... Cadres Cadres Education Increases

the new

entrepreneurs.

he theses f technocratic

ontinuity

nd

power

conversion

redict

he

opposite, hough

hetwodescribe

ifferentecruit-

ment

processes.

As

to

who

will benefitmost from

private enterprise,

Nee

(1989) proposes

n

his market ncentive hesis hat

people

with

high

educationwillprospermore nd thatcadres as entrepreneursillenjoy

no advantage;

the

technocraticontinuity

hesis

grees. Szelenyi'sdata

suggest

hat

cadres,

once

they

tart

business,

will

receive return n

their

adreship;

he

power

conversion

hesismakes the

same

suggestion

and describes

he

process

of informalization

hrough

which the

ghost

of

the defunct

arty rganization

an still nfluence

utcomes.

Finally,

according

o

the

theory

f

structural

ompensation,nequalitieswill not

grow.

n

contrast,

he

corollary

f both the technocratic

ontinuitynd

power

conversion

rguments laiming

he

survivalof the

old elite

s

an

increase n inequalities.

Erosion fromBelow versusTransition romAbove

I

propose

o

distinguish

etween

he

erosion f

the

socialist

conomy nd

the transition

o a

market.While

the

erosion

s

initiated

rimarily rom

below

by

self-interestedndividuals

ursuing rivategain,

the

transition

is

initiated

rimarily

rom

bove, through

ecisive

egislative ctionwith

the

explicit urpose

of

creating

market

conomy.During the erosion,

the socialist tateeither ightsheprivate ector r makesconcessions t

considers

emporary.

he

transition o a market

conomybegins when

the state

makes a

credible ommitmento create he

egal institutionsf

a market

economy North 1993),

institutionshat are

intendedto be

permanent,

hat

guarantee

ecure

property ights,

nd

that do not dis-

criminate

gainst

the

private

ector. will

argue

thatthe

changing

lite

47



10/31


theses apture n earlierperiod: he periodof

the erosion f the socialist

economy.4 he surviving lite rguments

escribe laterpoint: he ctual

transition.

In all socialist conomies small private ector-often referredo as

the "second economy" Grossman1977;

Kemeny

1982; Galasi 1985; Los

1990)-always exists,but it is suppressed

nd severely estricted.t is

limited o being mall, abor ntensive, ndoften nformalnd is confined

to

a

local market f households.These

restrictionsecreasethe barriers

of

entry,

s little

apital

is

needed

and as

specialized

killsare of little

usebecausetheconfinedmarket nd small ize imit

hedivision f abor.

Moreover,these restrictionseduce the incentives orthose bestoff n

thesocialist ector oparticipate

n

the second

economy.

In

early stages of the erosion, he state tries

to confine

he

private

sector o theconsumer conomy Aslund1985,pp. 66, 169; Berend 1990,

p. 189). Private ntrepreneursre restrictedo

selling oods and services

to consumers nd are forced o buy mostof theirraw material

n

the

retailmarket Kornai 1992,p. 507). By

building wall between

he

state

and the private ectors, he stateprevents he

flow

f

material esources,

labor, and

skill

between he

two sectors

f

the

economy Gabor 1989, p.

340). The very urpose fthisbarriers topreventhe lite fthe ocialist

sector rom

efecting o

the

second economy nd the eliteof

the

private

sector rom uying

ts

way

into

the socialist ector.

Duringthe

ater

phases

of the

erosion, ome restrictions

n the

private

sector

re lifted r are

enforced

ess

vigorously.

his

loosening

f restric-

tions createsnew segments

n

the

private

ectorwith

higher

arriers

o

entry

nd

greater

ncentives

or

those

n

the

first

conomy

o

join

in.

Nevertheless,

ven

under the boldestreforms

many

restrictions

emain

in

place-most important,

he

prohibition

f

property

low

from

he so-

cialistto theprivate ector, he imit n the number f employees, nd

the exclusion

f the

private

ectorfrom ntire

ections f the

economy,

such as health

are, education,banking,wholesale,

nd

foreign

rade-

and state nd

party

fficials

re

still

xplicitly,hough

ot

lways

success-

fully, arred

from

articipating

n

the

private

conomy.

The

transition emolishes

he

wall between he

private

nd

the

state

sectors,

nd the

private

ector

ecomes n

equal player

n

the

economy.

Now the

private

ector an

engage

n

capital-intensivearge-scale

manu-

facturing,

nternational

rade, nationwide ervices,

r

big

construction

projects, ll of whichwerethe ole privilege fthe ocialist ector arlier.

4 Atkinsonnd

Micklewright1992,pp. 122-33) show hat here s a slight

ncrease

in inequalities

lready t the end of the 1980s n Poland and Hungary, he two

countries here he

rosion hasedeveloped hefurthest.

48



11/31

Transition

rom ocialism

While during

he

period

of erosiontheprivatesectordoes not pose

a

direct hreat o

the

obs

of

cadres

n

thestate ector,

he

transition orces

cadres

to swimor sink.

Therefore,

hefurther

he

economy

moves

away

from ocialism, hemore

ikely

we are to see cadrestoiling

n

the private

sector.Thus, contrary

oNee's claim,the ncompletenessf market e-

forms

s

precisely

what

keeps

cadres

away

from

rivate nterprise.

During the

transition,here

are two

privatesectors. The

first s a

traditional ector,

mostly

he

product

f the erosion

phase;

the second

s

an

expansive

modern

ectormade

possible by

the

privatization

f state

property nd bynew legal forms

f

entrepreneurship

hatallow

private

enterpriseso accumulate apital Staniszkis1991, p. 47). Hungarywas

the

country

here he

private

ector

eveloped

hefurthest

n

theerosion

phase. Privatefarming

nd

private

onsumer ervicesbecame tolerated

in the1960s.

This

happened ventually

n

all socialist ountries o some

degree Rumer 1981;

O'Hearn

1981;

Radio Free

Europe 1984;

Aslund

1985; Cochrane 1988;

Ronnas

1989;

Zubek

1991).

Hungary,however,

made another

tep

in

1982,

when

private

ndividualswere allowed to

form

mall business

artnerships

nd to make contracts

ith tatefirms.

The

1982

law was not meant to

be a first

tep

in

the transition o

a

market conomy ut a temporary easure ocopewith ome ofthemany

problems aced by

the socialist conomy Rona-Tas 1995). The lack of

political

commitmento

a

private

ectorwas

apparent

from

he

many

restrictionshat werekept

n

place, such

as limits n size, credit, nd

foreign rade,

nd

from he

forcing

f these

partnerships

o

operate

with

full

iability.

In

Hungarythe transition o

a

market conomy

an be dated from

January1989,

when

the so-calledLaw

on Economic Associations ook

effect.

This law was introduced

y

the

Hungarian

Socialist

Workers'

Party HSWP), whichdisintegrated ytheend ofthatyear, osingover

600,000

of its

700,000

members

fter ts last

congress

n

October. The

new law laid the foundation or

the

privatization f the state sector,

introduced

rivate

imited-liabilityompanies, opened the Hungarian

economy

o

foreign

nvestment,

nd

declared the

principle

f "sector

neutrality,"ifting

ll

discriminationgainst heprivate ector, ncluding

limitations

n size and area of ctivity. he caretaker

overnment, hich

managed

the

economy

n

the

power

vacuum

preceding

nd

ensuing he

final demise of the

HSWP, began

the

implementation

f the

Law on

EconomicAssociations.However,thecreation fa coherentegal system

to

underpin

market

conomy

was left

o

the

noncommunisteadership

that

took

power

n

the

spring

f

1990.

The

most mportant

nstitutionsf a market conomy

were put into

place between 989

and 1991.These ncluded deregulated rice ystem,

49



12/31


TABLE 2

INDICATORS OF THE GROWTH OF THE MARKET SECTOR

1980 1985 1988 1991 1992

Corporate nterprises:

Limited-liabilityompanies,

joint-stock ompanies,

and

joint

ventures

.........

NA

370

919 42,695 59,363

Limited iability ompanies

only

.

.......... ...

.. .

450

41,204 57,262

Noncorporate nterprises:

Business partnerships ......... NA 34,926 33,821 52,136 70,597

Sole

proprietornterprises

..

113,000 170,000 211,536 317,218

SOURCE.-Data

on

sole

proprietornterprises

or

1980-88

are

from entralStatisticalOffice 1984,

pp. 187, 214; 1986, pp. 177, 208; 1989, pp. 173, 204; for 1992 HVG (1993, p. 83). Data on other

organizations

re

from al6

and

Lipovecz 1989, p. 774, 1993, p. 509).

a

capital

market

or

private

nd institutional

nvestors,

nd a

decentral-

ized

banking

nd insurance

ystem.

etweenthe end of

1988 and

1991,

thesize of theprivate ector ncreased onsiderablytable 2).

In

1991

the

Hungarian private

sector

therefore ad three different

segments-privatefarming, oncorporate nterprise,

nd

corporate

n-

terprise

r

imited-liabilityompanies-reflecting

o

some extent

he

his-

tory

f the erosion nd

the

subsequent

ransition o a

market

conomy.

The three

different

ypes

of

entrepreneurship

how

different

atterns

of recruitment

nd

of

success and have different

ffects

n

the income

hierarchy.

he first

ne, private farming,

s

the

creationof the

early

erosion

f socialism.

With

the

onsetof

the

transition, rivatefarming

s

undergoing ransformation,ut since theprivatization fland and the

dissolution

f

agricultural ooperatives

re still

n

progress,

can

say

little bout

those

hanges.

The

bulk of

private arming

s

still mall

scale,

labor intensive,

nd

builton

family

abor.

The

second

form

f

entrepreneurship,oncorporate

nemjogi

zeme'lyi-

se'gu) nterprise,

n

the

forms

f ole

proprietorships

nd business

artner-

ships,

is

partly

lso

the

product

of the erosionof

socialism. The vast

majority

f

people

in

this

category

re

sole-proprietor-business

wners

such as

artisans,

small

tradespeople,

nd

self-employed

ntellectuals.

Most forms f thesenoncorporate,ndividualbusinessesweretolerated

from he

earlyyears

of

communism,

ut

they

were

granted

new

rights

during

the transition.

here are also different orms f

noncorporate

partnerships,

uch as

work

partnershipsgazdasadgi unkak6z6sseg),

e-

posit

ssociations

bete'ti airsasaig),

nd civil-law

ssociations

polgadriogi

tairsasag). artnerships

were first

ccepted

in

1982.

Most

partnerships

50



13/31

Transition

rom ocialism

are composed

f

self-employed

ndividualswith

few

employees nd little

capital.

Most partnerships

hat wanted to

expand

transformedhem-

selves nto imited-liabilityompanies.Between1989 and 1991,thenum-

ber

of most

types

fpartnerships,xceptdeposit

ssociations,

eclined.

These deposit

associations llowedpeople

to take advantage of the tax

code

without

aving

to

put

down

start-up apital.

Finally, he third

ype f entrepreneurship

s corporatejogi szemelyi-

segu) privatebusiness,

whichbecame

possibleonly

when

the transition

introduced

imited-liabilityompanies

n

theprivate ector.To register

a limited-liabilityompany,

ne had to

put up

a minimum f one

million

HungarianforintsHUFs), worth ver$13,000 n 1991,as security.

Not all

limited-liabilityompanies

re

private;many

are either

ully

orpartially

tate

owned. Between

he summer f

1989,

after he Law on

Enterprise

ransformation

as

declared,

nd

the

spring

f

1990,

about

100 state

firms ook

advantage

of a

loophole

n

new regulations nd split

their perations

nto

dozens of subunits

designed

o be

limited-liability

companies Stark

1990, 1992;

Borocz

1993b).

The center f the

firm

hen

acted

as a

holdingcompany

hat held

majority wnership ights

ver

these

units

n

principle

ut often

was littlemore than an

empty

hell.

The actual control estedwith themanagement f thesenewlyformed

companies,

who often

cquired

some of the shares nd

became

minority

owners

as well.

The

legal loophole

was closed

in

the

springof 1990,

when

he

StateProperty gency

was created. tate

firms

re still

orming

limited-liabilityompanies,

but

these

can be given

nto private hands

onlythrough

he State

Property gency.

Thesespin-offsonstituted

small

but mportantegment

fthenewly

emerging

imited-liabilityompanies, omprising

ot

more

than

10%-

30%

of

all

such

companies

t the time

Kocsis 1992).

The majority f

private imited-liabilityompanieswere foundedby individualsor pri-

vate

groups

o

take

advantage

of the

new

opportunities

rovidedby

the

privatization rocess

o

buy

machines r

buildings

rom tate firms nd

by

the liberalization

f

domestic nd

foreign

rade to sell

goods and

services.

n

1991,

of the

top 3,000

firms

by sales)

that

were

n

partial

or

full

private

ownership, nly

a small fraction

were noncorporate nter-

prises,

while

the

majority

were

imited-liabilityompanies

table 3).

DATA AND METHODS

The data

in

the

analysis

were

acquired

from sampleof 1,000 people

over

ge

18 nterviewed

n

the

pring

f

1989and then gain n the pring

of

1991.

The

sampling

methodwas

multistage luster ampling. n the

first

tage,

112

of the

3,100settlements

n

Hungarywere

selected n such

a

way

that the

population

of

the

112

settlements

ollowed losely the

51



14/31


TABLE 3

DISTRIBUTION OF THE

ToP 3,000

ECONOMIC UNITS

IN 1991 THAT

WERE PARTIALLY OR COMPLETELY

OWNED BY NONSTATE INVESTORS*

%

of

Total Nonstate

Enterprises

Corporate enterprises

.............. ......... 97.4

Limited-liability

companies ............ 71.0

Joint-stock companies

........... ........

19.9

Noncorporate enterprises .......... ........

2.6

SOURCE.-Hungarian Central tatistical ffice ata Base.

*

The hierarchyf conomic nits

s

measured y heir ross nnual ales.

distribution f the entirepopulation f thecountry n 15 demographic

characteristics.

n the

econd tage,usingresidentialegisters,heproper

number f ndividualsweredrawnfrom ach settlemento that henum-

bers reflected

he

nationaldistribution

f

ndividuals ysettlementype.

This selection rovided hree

amples

of

1,000respondents,nd

for ach

sampleanother1,000 ndividualswere chosento replacethosewho did

not respond.

In the 1989 survey ll three

amples were nterviewed. f the 3,000

people, 162 (5.4%) refused,

nd 622

(20.7%)

were

unavailable

forother

reasons.These missing esponses

were

replacedrandomly rom

he

sup-

plementary ool

of

respondents,

o that hree

roups

f

1,000

nterviews

were

completed.

n

the

1991survey

he first

ample

of

1,000

of

the

first

wave

was reinterviewed.rom

these,

15

peopleresponded,

nd random

substitutes ere

drawnfrom he econd

ample

of 1,000of the

first

ave

tomakeupfor hemissing ases. Afterleaning hedata,thefinal ample

size was

979.

To

measurepersonal

ncome

PINCOME89,

PINCOME9

1),

the nter-

viewer

sked

separately

or

primaryncome,

or

econdary

ncomefrom

a

second

ob, contracts, ips,

household

arming,

nd

rental

f an

apart-

ment, and,

or

equipment,

nd for

profit

rom

business

nterprise,

hen

summedthese

figures.

He also asked

for

the

person's

otal taxable

in-

come.

I

used

the

larger

of the two

figures.

o

calculate

the

change

n

incomebetween 989

and

1991

dINCOME),

I

subtractedncome

n

1989

from ncome n 1991. I also generatedncomequintilesfor bothyears

and

from hat reated

ummy

ariables

o

measure

f

respondenttayed

in

thetop quintile STAYUP),

movedup

from

hebottom uintile BOT-

TOM1),

or moved

up

from he bottom wo

quintiles BOTTOM2)

be-

tween

1989

and

1991.

52



15/31


The validity f elf-reportedncome s always uspect.Previous tudies

of ncomereporting

n

Hungary how that ncome reported rom

tate

employmenty therespondents quite reliable. ncome receivedfrom

the private ector

s

generally nderreported. ccording o estimates,

about

one-third f all nonstate ncomes eceived re

inaccessible hrough

survey uestionnairesEkes 1987;

Kolosi

and R6bert1991).

As

the ource

of

the underestimations

primarily

ncomefrom he

private ector,

n-

comes

fthose

participating

n

the

private

ectorwill

be underestimated.

This suggests hatbecause

the size of the

private ector ncreasedduring

that

period,my

data will underestimatehe

change

n

incomes.5

The three ntrepreneurialtrategiesremeasured s dummy ariables.

A respondent

ith ncomefromhousehold

armingHHF)

was

consid-

eredto have

participated

n

this

ctivity.Noncorporate ntrepreneurship

(NONCORP)

is defined s

being engaged

n

any

form f

noncorporate

enterprise

n

1991,

uch as

being

n

artisan

r

small

tradesperson,aving

a

single-proprietor

icense

o run a

business

n

manufacturing

r

service,

or

being

a member

f a

registered

usiness

partnershipwork partner-

ship,

civil-law

association,

or

deposit association). Unfortunately,

he

small

sample

size

did not allow me to

separate

ole

proprietorships

rom

partnerships. corporate ntrepreneurCORP) is an ownerorco-owner

of a

limited-liabilityompany.

A

former

adre

CADRE)

is a

person

who

was

both

a

member

f

the

HSWP and held a position

f

authority t a low (AUTH89L), middle

(AUTH89M)

or

high (AUTH89H)

level

in

the

spring

of

1989 (i.e.,

CADRE

is a

binary

variable

coded

as

"1" if

HSWP member

with au-

thority

nd

"0"

otherwise).

he

category

f ex-cadre

s thus based on a

wider

definition

f the

past

elite.

t

includesnot ust

the

very opof the

communist

ierarchy-the

o-callednomenklatura-but

veryone

who

formallyoinedtheHSWP and reached omeposition fpower. By the

mid-1980s

n

Hungary, artymembership

as

required nly

for ertain

highpositions. hus,

the

category

xcludes

many

rtists nd

profession-

als who

belonged

to the

top layer

of

Hungarian society

nd

reached

important ositions y

the ate

1980s

without

ormallyoiningthe party.

Including hem

nto the ex-cadre

ategory

would

have overemphasized

the

continuity

n

the

transition,

ince hese

people

were

quickly

mbraced

by

the new

leadership.

5

Incomes

f

private ntrepreneursillbe

considerablynderestimated,ecause hey

can

manipulate

heir

usiness

ncomes

n

order

o

minimize heir

ersonal ncomes

and thus void

ncome ax. For

nstance,

uccessful

ntrepreneursriveWestern ars

that shouldbe counted s

part

of

their

ersonal ncomes. nstead,thesecars are

acquired hrougheasing greements

nd

are

counted s

operatingxpenses.

53



16/31

American ournal

f

Sociology

Human capital is measuredbythe number fyears

of educationthe

respondent ompleted y 1989 EDUC).6 The

respondent's amily ack-

ground, apping nto hildhood ocialization,s measured y two dummy

variables ndicating

whether

he

respondent's

ather

was

self-employed

as

either private

farmer

r

a

nonagriculturalntrepreneur

FPFARM,

FSENTR).7 These last

two variables re intended

o revealanyevidence

of

nterruptedmbourgeoisement.

The

demographic ackground

variables are

age

(AGE)

and

gender

(GENDER;

female

=

1).

These

two variablesare included s controls.

Because gender

s

strongly

orrelated

with

both

partymembership

nd

entrepreneurialnvolvement,

wanted

to factor

out

its

effect.

Age

is

included o enhance heeffect

f

parental ackground, s younger eople

are more

ikely

o

start

business ut ess

ikely

o

have

parents

who

ran

a

private

farm

r

business.

Thus, age may

act

as

a

suppressor.Age

is

also

related

o

education,

s

younger eople

are

better ducated.

Table

4

liststhe variables

used

in

this

tudy.

FINDINGS

The most raditional orm fentrepreneurship,ousehold arming, ives

no

advantage

to

ex-cadres

s shown

n

table 5. Household

farming

oes

not require

n unusual amount

f

formal ducation.

On

the other

hand,

people

whosefathers ere

ndependent

armers re more

ikely

o

follow

this venue. Though

formal

ducationdoes

not

ncrease ne's

likelihood

to

participate

n

household

arming, nowledge ransmittedhrough he

family

oes.

When

gender

nd

age

are

included, heanalysis hows that

men

are more

nvolved

n

household arming han women

even though

household

arming

s

usually family nterprise.

his

is because

single

women re less ikely o farm han inglemen.Youngerpeopleare more

likelyto farm,

nd

indeed

the

inclusionof age enhances the effect f

parentalbackground.

As table

6

indicates,

former

arty

adres are more

ikely

o

become

noncorporate ntrepreneurs

han

others.However, the effect fhaving

been

a

party

adre

ceases

to

be

significant

nce

education

s

included

n

the

analysis. Thus,

cadres are more

ikelyto startnoncorporate usi-

nessesnot because they

re

cadres but because theyhave

humancapital.

Noncorporate ntrepreneurship

s

not nfluenced

y

family ackground.

6

I

also

carried ut my nalyses sing

dummy

ariables or lementary,

econdary,

and

tertiaryducation

o

test

f

the ffect f

educations due to

credentialing.

ow-

ever, hat

did

not

mprove

hefit

n

any

of

themodels.

'

I

do nothave thekind

of detailed

nformationnfarming

zel6nyi1988) used

to

estimatehevalue

of

householdroduction.

54



17/31

TABLE 4

DESCRIPTION OF VARIABLES

Variable-Description

Coded

Value Univariate

Distribution N

HHF-commercial household

farming

........................

Yes = 1

68

979

NONCORP-noncorporate

entrepreneur

....................... Yes

=

1

134

979

CORP-corporate entrepreneur

(limited-liabilityirms, tc.)

..... Yes

=

1

55

979

STAYUP-stayed

in the

top

incomequintilebetween1989

and 1991 ..........................

Yes = 1

100

826

BOTTOMl-moved

out of the

bottom

ncome

quintile

between

1989 and 1991 ......................

Yes

=

1

97

826

BOTTOM2-moved out of the

bottom wo

ncome uintiles

between

1989 and 1991 ..........

Yes

=

1

100

826

CADRE-party

memberwith

some

authority

.................. Yes

=

1

45

979

AUTH89L-low-level

authority

..................

Yes

=

1

53 979

AUTH89M-middle-level

authority

..................

Yes

=

1

47

979

AUTH89H-high-level authority

Yes

=

1

13 979

FPFARM-father

was

a

private

farmer

.........................

Yes

=

1

170

979

FSENTR-father

was a

nonagricultural

ntrepreneur

.. Yes

=

1

53 979

FSEMP-father was self-

employed

ither

s a

private

farmer r a nonagricultural

entrepreneur.......................

Yes

=

1

223

979

GENDER

..........................

Female

= 1

558

979

Mean SD

Minimum Maximum N

EDUC-years

of

education

completed

.........................

10.38

3.42

1

22

979

AGE

............. .............

47.42 16.22 21

90 979

PINCOME89-personal income

in

1989

n

1,000 Hungarian

forintsHUFs) ..................... 6.64 3.68 1.70 30.00 878

PINCOME91-personal

income

in

1991

n

1,000

HUFs

..........

10.58

7.08

5.00 82.00 881

dINCOME-change

in

nominal

personal

ncomebetween

1989

and 1991

.......................... 3.98

6.34

-22.00 75.00 826



18/31

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This form

f

enterprises the onemost qually open to men and women.

In fact, he onlyfactors hatmake any differencere education nd age.

Education has an importantnfluence, ecause mostof thesenoncorpor-

ate businesses re forms f

self-employment,herepeople can substitute

special

skills

for

scarce

capital. Skilled workers

nd professionals re

especially ikely

to

choose this business form

ither ndividually r in

partnership ithothers.Youth,

again,

is

an advantage.

Ex-cadres re at an advantage n

starting orporate nterprisestable

7).

Some

of this

advantage

s

explained

by

the

higher ormal ducation

ex-cadres

ossess,but

the effect f

past cadreshipdoes not disappear n

the fullmodel,even after ontrollingorholdinga top- or mid-level

management osition

n

1989.

Cadres are at

an

advantage even among

top and middlemanagers.

None of the

family ackground ariables are

influential.While

men

are more

ikely

o

choose

this

typeof enterprise,

their

net

advantage

cannotbe discerned

n

the final

model, because it is

mostly ue

to their

osition

f

power

n

the

previousregime.Just s for

farming

nd

noncorporatenterprise,

lder

people

are less

likely o em-

bark

on

this

new

form f

entrepreneurship.hus,

ex-cadres re

more

likely

o

pursue

both

noncorporate

nd

corporate ntrepreneurship.

ven

though heir dvantage n theseactivities s due to someextent o their

higher verage education, hey

till

enjoy a net advantage

n

corporate

entrepreneurship

fter he effect f

education

s

controlled.

Overall,

cadres nvolved n business

trategies

re

very uccessful,

s

measured

y change

n

ncome etween

989

and

1991.

As

table 8

shows,

the

average

income

of

cadres

engaging

n

businesswas

already higher

than

that of

any

other

group

n

1989,

and

their

dge

increased

n

the

next woyears.

Ex-cadres urned

ntrepreneurs

ore han

doubled their

reported ersonal ncomes;

adres not

engaging

n

such

activities aised

their ncomesby only 54%. Noncadreentrepreneursncreased heir n-

come

by 73%. They

moved closer to this second

group

of

cadres but

were still

only

n

third

place.

Since

incomesfrommarket

ctivities re

underestimated,

he ctual

dynamics

s

probably

ven

stronger

han hese

figures uggest.

All

three

ypes

fbusiness

nterprise

ncreased

he

participants'

ncome

(table 9). Ex-cadres,however,

arned

an

extra

3,867

HUFs even after

account

for

education

nd whether

he

fatherwas

self-employed

ither

as a

private

farmer

r

as an

entrepreneur

utside

gricultureFSEMP).

WhenI extend hemodelto includethe interactionsfcadreshipwith

the

three

ypes

of

enterprise,

t

shows that cadres turned

ntrepreneurs

have

an

advantage

in

corporate

business.

Their

advantage

in

private

farming

nd

noncorporate

usiness s

statistically onsignificant.

hen

I

include nteraction erms

or

the

type

of

businesswith education nd

familybackground,

he

analysis

shows some

evidence

for both Nee's

58



21/31

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22/31

American

Journal f Sociology

TABLE 8

NOMINALNCOME N 1,000 HUFS

1989

1991

Mean SD Mean SD

Entire

population

..........................................

6.79 3.71

10.77 7.17

Noncadres not nvolved

n

market

trategies

6.31 3.18

9.57 5.16

Noncadres nvolved n market

trategies

7.16 4.06 12.41

8.43

Cadres

not

nvolved

nmarket

trategies

11.73

5.08 18.11

10.74

Cadres involved

n market

trategies

12.05 5.08 25.33

16.68

(1989, 1991) market ncentive hesis and

Szelenyi's 1988)

interrupted

embourgeoisement

heory. For

all models n

table

9,

I centered

duca-

tion,

so the

first-order

erms

for

enterprise ype

are for

a

person

with

average

education.)

There

is

an extra

reward

for

education

nd

proper

family ackground

n

farming

ut not

n

other

ypes f business.

n

the

full

model, ex-cadres arn

a net

premium

f

7,080 HUFs on theirpast

status

f

theybecomecorporate ntrepreneurs.

To see how relative

positions

n

the income

distribution

hanged,

examined heaverage change n incomeby quintiles f the1989 ncome

distribution.

able 10 shows that

people

n

the

top

two

quintilesgained

the

most

n

nominal ncome,

but

the

bottom

uintile

was a

close third.

The second and third

quintiles

ncreased much

less, and, given

high

inflation,

his

was a decline

n

real terms.

Household

farming

as most

present

n

the

third nd fourth

uintiles

and least

in

the

top quintile.

Noncorporate ntrepreneurs

ere most

likely

o come from he

top

two

quintiles,

while

corporate nterprise

as

predominantly

or hose

who

were

rich

lready

n

1989. Table

11

shows

how people moved aroundas a resultof entrepreneurship.orporate

entrepreneurs

ere the

most

ikely

o

stay

n

the

top quintile,

followed

by noncorporate

ntrepreneurs.

one ofthe

trategies

ere

of

anyhelp

n

moving

ut ofthe

bottom

uintile.

Household

farming, owever, ssisted

people

in

moving

out of the bottom wo

quintiles.Finally,

as table 12

shows,

all threemeasures

f

nequality

f

personal

ncomes-the coeffi-

cient

of

variation,

he mean relative

deviation,

nd

the Gini

index-

increased.8

DISCUSSION

In

this

tudy found

hatcadres re no more

ikely

o become

household

farmers

han

others,

which matches he

empirical

laims of

Nee

(1989,

8

I

calculated

the same measures

for

family

ncome

and

family

ncome

per

capita

and

found

the same

trend.

60



23/31

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