Spatial Inequality, Poverty and Informality in the Democratic Republic of the Congo

Douglas Amuli Ibale, Frédéric Docquier and Zainab Iftikhar
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Douglas Amuli Ibale: Université catholique de Bukavu
Frédéric Docquier: LISER - Luxembourg Institute of Socio-Economic Research
Zainab Iftikhar: Universität Bonn = University of Bonn, CEPR - Center for Economic Policy Research

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Abstract: We construct a model incorporating labor market frictions to elucidate income disparities among provinces, sectors (formal vs. informal), and skill categories (skilled vs. unskilled) within the Democratic Republic of the Congo. Through quantitative analysis, we demonstrate the significance of technologies, human capital, infrastructure, and labor market frictions in explaining spatial and intra-province inequalities. Although technological disparities emerge as the primary drivers, our findings underscore the presence of strong "O-ring" inequality patterns. This implies that effective development policies necessitate a mix of coordinated policy measures. When considered in isolation, policies focused on enhancing education, infrastructure, and mitigating labor market frictions could potentially escalate poverty along the intensive margin. Additionally, a development policy disregarding the informal sector also yields counterproductive distributional and poverty outcomes.

Date: 2024-01
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Published in World Development, 2024, 173, ⟨10.1016/j.worlddev.2023.106411⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04954376

DOI: 10.1016/j.worlddev.2023.106411

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