The unequal costs of war: income inequality amid the Russia–Ukraine conflict

Purpose This study analyses how the Russia–Ukraine war reshaped income inequality dynamics across 10 post-Soviet economies, focussing on whether pre-existing structural dependency conditions influenced the transmission of geopolitical shocks into domestic income distribution. Design/methodology/approach This study applies the fully modified OLS model to a balanced panel data set of 10 post-Soviet countries from 1998 to 2023, enabling the estimation of both overall and country-specific results. Findings The empirical results reveal that the Russia–Ukraine war is associated with rising income inequality in several post-Soviet countries, with the largest effect observed in Ukraine. Russia-aligned countries suffered the most due to their close ties with Russia, while Western-aligned countries were cushioned by European Union (EU) support. The interaction between the war period and economic dependency, proxied by remittance inflows, is positive and statistically significant, particularly in highly remittance-dependent economies such as Kyrgyzstan, suggesting that pre-existing dependency linkages intensified inequality pressures during the shock period. Trade openness, foreign direct investment, oil prices and inflation are associated with widening income inequality, albeit with heterogeneous country-level outcomes. Practical implications Results suggest that post-Soviet countries should reduce dependency on Russia by diversifying economic relations and pursuing deeper integration into the EU or establishing an adjacent regional union. Originality/value This study advances dependency theory by introducing the concept of shock-activated dependency, which reconceptualises dependency as a dynamic rather than static condition. It shows that dependency operates as a transmission mechanism through which geopolitical shocks are transmitted into domestic income inequality. By highlighting how remittance dependency amplifies vulnerability during crises, this study modernises dependency theory for analysing the distributional consequences of geopolitical disruptions.