Working Paper 353 - Inequality and the role of macroeconomic and institutional forces in Africa

Batuo E. Michael (), George Kararach () and Issam Malki
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Batuo E. Michael: Westminster Business School, University of Westminster, https://www.westminster.ac.uk/
George Kararach: African Development Bank, https://www.afdb.org/en

Working Paper Series from African Development Bank

Abstract: This paper attempts to offer an empirical assessment of the main macroeconomic and institutional drivers of inequality in Africa. We also propose a two-step econometric methodology to account for the distributional properties of income per capita of economies in our sample. We employ panel data models and data sets encompassing 52 African countries. spanning the years 1980–2017. The findings suggest that (i) income per capita in Africa is divergent and there exist groups or “clubs” of convergence, (ii) the Kuznets’s curve relationship holds only for economies at the bottom of the income distribution, and (iii) macroeconomic and institutional factors play a limited role across African economies. This last finding shows that the distributional property of income may offer insight into which economic forces could help to reduce inequality in Africa.

Keywords: Income convergence and distribution; income inequality; macroeconomics and institutional effects; Africa JEL classification: C33; O4; F15; D63 (search for similar items in EconPapers)
Date: 2021-10-12
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:adb:adbwps:2479

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