The Functionality of Informal Practices as Survival and Re-Distribution Mechanisms

The thesis explores the socio-economic implications of informal payments and gifts in the public service sector across 29 post-Socialist transition economies. Utilizing data from the EBRD and World Bank's Life in Transition Survey III, it employs a country fixed-effects logit model to analyze the distinct roles of informal practices and corruption. Findings indicate that while demanded payments exacerbate poverty, gratitude payments do not negatively impact the poor. The study challenges the notion of informal practices as a redistribution mechanism for underfunded public services, revealing complex interactions between formal and informal aspects for users.