Financial Access, Governance and the Persistence of Inequality in Africa: Mechanisms and Policy instruments

Vanessa Tchamyou ()

No 20/027, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: The aim of this paper is to investigate policy instruments by which the persistence of inequality is affected through financial development channels in 48 African countries for the period 1996 – 2014. Financial dynamic channels of depth (money supply and liquid liabilities), efficiency (at banking and financial system levels), activity (from banking and financial system perspectives) and stability are used. Political (“voice and accountability” and political stability), economic (government effectiveness and regulation quality) and institutional (rule of law and corruption-control) governance policy instruments are also involved. The empirical evidence is based on the Generalised Method of Moments (GMM). The results show that financial depth and financial stability are the best channels of reducing inequality. Moreover, the relevance of these financial channels is significantly apparent when policy instruments are exclusively governance variables. The comparative relevance of governance dynamics in the persistence of inequality is discussed. The study responds to two recent policy and scholarly challenges, notably: the persistence of inequality in Africa and the relevance of governance in addressing income inequality by means of financial access.

Keywords: Finance; Governance; Inequality; Modelling; Africa (search for similar items in EconPapers)
JEL-codes: C50 I30 O10 O16 O55 (search for similar items in EconPapers)
Pages: 27
Date: 2020-01
New Economics Papers: this item is included in nep-cfn and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

Forthcoming: Journal of Public Affairs

Downloads: (external link)
http://www.afridev.org/RePEc/agd/agd-wpaper/Financ ... uality-in-Africa.pdf Revised version, 2020 (application/pdf)

Related works:
Working Paper: Financial Access, Governance and the Persistence of Inequality in Africa: Mechanisms and Policy instruments (2020)
Working Paper: Financial Access, Governance and the Persistence of Inequality in Africa: Mechanisms and Policy instruments (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agd:wpaper:20/027

Access Statistics for this paper

More papers in Working Papers of the African Governance and Development Institute. from African Governance and Development Institute. Contact information at EDIRC.
Bibliographic data for series maintained by Asongu Simplice ().