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The Effects of Taxation on Income Inequality in Sub-Saharan Africa

Author

Listed:
  • Idrissa Ouedraogo

    (Thomas Sankara University
    CEDRES, QGPE)

  • Issa Dianda

    (CEDRES, QGPE
    Nazi Boni University)

  • Pegdwende Patrik Roland Ouedraogo

    (Thomas Sankara University
    CEDRES, QGPE)

  • Tiraogo Rodrigue Ouedraogo

    (Thomas Sankara University
    CEDRES, QGPE)

  • Bassirou Konfe

    (Thomas Sankara University
    CEDRES, QGPE)

Abstract

This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in Sub-Saharan Africa over the period 1980–2018. We use two-stage least squares and the instrumental variables quantile regression estimates. We find that taxation widens income inequality and that the increasing effects of taxation on income inequality are higher in the most unequal countries than in the least unequal ones. The paper provides evidence that countries in Sub-Saharan Africa should improve the progressivity of their tax systems, so that taxation policy can be used to reduce income inequality.

Suggested Citation

  • Idrissa Ouedraogo & Issa Dianda & Pegdwende Patrik Roland Ouedraogo & Tiraogo Rodrigue Ouedraogo & Bassirou Konfe, 2025. "The Effects of Taxation on Income Inequality in Sub-Saharan Africa," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 67(1), pages 84-149, March.
    • Handle: RePEc:pal:compes:v:67:y:2025:i:1:d:10.1057_s41294-024-00235-z
    DOI: 10.1057/s41294-024-00235-z
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    More about this item

    Keywords

    Income inequality; Taxation; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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