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Frontier Technology Readiness, Democracy, and Income Inequality in Africa

Isaac K. Ofori

MPRA Paper from University Library of Munich, Germany

Abstract: The proliferation of frontier technologies in the Global South has increased over the past decade. Despite this development, evidence-based policy recommendations regarding their socioeconomic impacts within the context of Africa are scarce. This study addresses this gap by employing macro data from 39 African countries to investigate the impact of frontier technology adoption (FTR) on income inequality. Additionally, the study explores whether democracy serves as a moderator of FTR, influencing a more equitable income distribution. Furthermore, this study assesses the inequality impacts of FTR across various policy thresholds of democracy. Results from the dynamic system GMM estimator reveal that: (i) FTR increases income inequality, (ii) democracy, particularly electoral and participatory democracy, mitigates income inequality, and (iii) FTR reduces income inequality only at a higher threshold of democracy (0.5 or better). This leads to the conclusion that, without inclusive democracy, FTR may impede Africa's social progress agenda by widening the income disparity gap.

Keywords: Africa; Frontier Technology Readiness; Democracy; Income Inequality. (search for similar items in EconPapers)
JEL-codes: I3 O31 O33 O55 Q01 (search for similar items in EconPapers)
Date: 2024-05-15
New Economics Papers: this item is included in nep-afr and nep-dev
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