Both interpersonal and cross-regional income inequality have risen to extremely high levels in Russia and China. This poses a challenge to these authoritarian postcommunist regimes, one nominally federal, the other nominally unitary. Both regimes have opted for policies intended to induce economic growth at the expense of highly unequal growth rates in different regions. What are the mechanisms by which a nominally-federal and a nominally-unitary state attempt to redress the tensions created by growing cross-regional disparities. The paper argues that rising cross-regional inequality is driven by the same trends that have produced high inter-personal inequality, and stem from the combination of growth-oriented national policies and the lingering legacy of the old socialist social contract. One reason for the difficulty in reversing these trends is the weakness of alternative institutional means for aggregating and representing broad social interests. This makes it difficult to pool gains and risks broadly, and encourages particularism and short time horizons.
