IDEAS home Printed from https://ideas.repec.org/a/oup/jafrec/v27y2018i1p108-126..html
   My bibliography  Save this article

Why Is Inequality High in Africa?†

Author

Listed:
  • Abebe Shimeles
  • Tiguene Nabassaga

Abstract

This paper computed asset-based inequality for 38 African countries in multiple waves, using over a million household histories, to study why inequality tends to be persistently high in Africa. The results show that within-country asset inequality is positively correlated with the returns to higher education, a finding that is corroborated by results showing a negative correlation between consumption-based inequality and the proportion of households that completed tertiary education. Countries with higher remittance flows also experienced lower inequality, whereas assets and goods market distortions tended to increase inequality in Africa. The paper also decomposed within-country inequality into components deemed to represent opportunities beyond the control of individuals and those attributed to individual efforts, such as education. At least 30% of asset inequality within countries was, on average, due to inequality of opportunity, though there were considerable differences across countries. In addition, the incidence of child mortality and disease burden of malaria and tuberculosis tended to increase with asset-based inequality of opportunity, which increased with ethnic fractionalisation but decreased with improved governance.

Suggested Citation

  • Abebe Shimeles & Tiguene Nabassaga, 2018. "Why Is Inequality High in Africa?†," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 27(1), pages 108-126.
    • Handle: RePEc:oup:jafrec:v:27:y:2018:i:1:p:108-126.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jae/ejx035
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Booysen, Frikkie & van der Berg, Servaas & Burger, Ronelle & Maltitz, Michael von & Rand, Gideon du, 2008. "Using an Asset Index to Assess Trends in Poverty in Seven Sub-Saharan African Countries," World Development, Elsevier, vol. 36(6), pages 1113-1130, June.
    2. Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
    3. repec:dau:papers:123456789/1552 is not listed on IDEAS
    4. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
    5. Paolo Brunori & Flaviana Palmisano & Vito Peragine, 2015. "Inequality of Opportunity in Sub-Saharan Africa," SERIES 08-2015, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Dec 2015.
    6. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality Of Opportunity In Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 585-618, December.
    7. Howell, Anthony, 2017. "Impacts of Migration and Remittances on Ethnic Income Inequality in Rural China," World Development, Elsevier, vol. 94(C), pages 200-211.
    8. David E. Sahn & David Stifel, 2003. "Exploring Alternative Measures of Welfare in the Absence of Expenditure Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(4), pages 463-489, December.
    9. John Anyanwu, 2011. "Working Paper 135 - International Remittances and Income Inequality in Africa," Working Paper Series 325, African Development Bank.
    10. Shantayanan Devarajan, 2013. "Africa's Statistical Tragedy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 9-15, October.
    11. Beegle, Kathleen & De Weerdt, Joachim & Friedman, Jed & Gibson, John, 2012. "Methods of household consumption measurement through surveys: Experimental results from Tanzania," Journal of Development Economics, Elsevier, vol. 98(1), pages 3-18.
    12. Nadia Belhaj Hassine, 2012. "Inequality of Opportunity in Egypt," World Bank Economic Review, World Bank Group, vol. 26(2), pages 265-295.
    13. Augustin Kwasi Fosu, 2015. "Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 44-59, March.
    14. Abebe Shimeles & Mthuli Ncube, 2015. "The Making of the Middle-Class in Africa: Evidence from DHS Data," Journal of Development Studies, Taylor & Francis Journals, vol. 51(2), pages 178-193, February.
    15. Duval, Laetitia & Wolff, François-Charles, 2015. "Ethnicity and remittances: Evidence from Kosovo," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 334-349.
    16. Vito Peragine, 2004. "Measuring and implementing equality of opportunity for income," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 22(1), pages 187-210, February.
    17. John C. ANYANWU, 2011. "International Remittances And Income Inequality In Africa," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 7, pages 117-148, May.
    18. repec:aic:revebs:y:2011:i:7: is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:oup:jafrec:v:27:y:2018:i:1:p:1-9. is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jafrec:v:27:y:2018:i:1:p:108-126.. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/csaoxuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.