The dynamics of income inequality in a dualistic economy: Malawi from 1990 to 2011

Giovanni Cornia and Bruno Martorano ()

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: This paper aims to document and explain the evolution of inequality in Malawi over recent decades using data from various national and international sources. Inequality rose between 1968 and the late 1980s due to the agricultural export-led development model adopted by the Banda regime, which favoured the estate sector and medium-sized farms and thereby created a ‘dualism within the dualism’ that exacerbated the inequality inherited from the colonial era. Between the early 1990s and the mid-2000s, inequality declined, in part owing to the adoption of the Starter Pack programme which covered all smallholders and substantially strengthened maize production per capita, including among the poorest farmers. Finally, inequality rose again between 2004 and 2011. Applying a microdecomposition analysis, this paper shows that a key driver of the rise in inequality during this period was the suboptimal structural transition of the economy from a low-inequality crop agriculture to high-inequality sectors such as livestock production, commerce, transport and formal and informal services located in both urban and rural areas. Such suboptimal structural transition was in part due to the decline of manufacturing induced by the trade liberalization of the 1990s and the skewed distribution of the rise in incomes from livestock production.

Pages: 33 pages
Date: 2017
New Economics Papers: this item is included in nep-iue
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.disei.unifi.it/upload/sub/pubblicazioni/repec/pdf/wp17_2017.pdf (application/pdf)

Related works:
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:frz:wpaper:wp2017_17.rdf

Access Statistics for this paper

More papers in Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa Via delle Pandette 9 50127 - Firenze - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Giorgio Ricchiuti ().