This paper assesses poverty and inequality trends in the transition and developing economies of Europe and Central Asia, and links these trends to discourses regarding vulnerability, exclusion, and sustainability.

It considers various definitions and indicators of poverty, inequality, exclusion, vulnerability, and sustainability; and concludes that—as is to be expected in a region that is dominated by middle-income countries—income poverty data offer important but incomplete insights into the region’s sustainable development challenges.

The paper also finds evidence to support arguments that reductions in income poverty and inequalities go together, and are broadly consistent with the region’s development trends. And, it presents a new approach to monitoring vulnerability to poverty in the region.