During the transition, the political, economic and social institutions in these formerly centrally planned economies underwent major changes which affected the distribution of public and private resources, both across and within countries. In particular, public social services crumbled in most of these countries (Bandara, Malik and Gherman, 2004), which contributed to the rise in poverty and inequalities as well as greater regional disparities, especially between rural and urban areas (Cukrowski, 2006, Anderson and Pomfret, 2004). On average, within-country income inequalities rose faster in this region than in any other between the early 1980s and the late 1990s.