Income Inequality and Redistribution In Sub-Saharan Africa

Miguel Nino Zarazua, Scaturro Francesca, Vanesa Jorda and Finn Tarp

Working Papers from African Economic Research Consortium

Abstract: The theoretical expectation postulated by standard economic theory is that high inequality would lead to higher redistribution via the collective action of the median voter. In this paper, we adopt an instrumental variable approach to test the median voter hypothesis with specific reference to sub-Saharan Africa (SSA). Overall, we find a positive relationship between inequality and redistribution, especially among middle income countries, which is driven by the abundance of natural resource rents. Thus, our results do not provide strong evidence to support the median voter theorem, but instead, call for alternative interpretations, more closely to the existence of multiple steady states.

Date: 2022-10
Note: African Economic Research Consortium
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Journal Article: Income Inequality and Redistribution in Sub-Saharan Africa (2023)
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