High levels of economic inequality may lead to lower economic growth and can have negative social and political impacts … significantly more than previously suggested. Currently, the average Gini index (a common measure) of inequality in Eastern Europe … is about 3 percentage points higher than in the rest of Europe. This rise in inequality was initially driven by …

Higher inequality reduces capital accumulation and increases the informal economy, which creates additional employment … links between inequality and informality because badly designed informality-reducing policies may increase inequality …