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The growth, poverty and inequality nexus in South Africa: Cointegration and causality analysis

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  • Olusegun Ayodele Akanbi

Abstract

This study empirically established the long-run relationship and causality effects that exist between growth, poverty and inequality. The analysis was carried out on a panel of nine South African provinces from 1995 to 2012. To capture poverty and inequality in a broader context, two measures of poverty (income and non-income) and three measures of inequality (income, education and land) were adopted for the study. The results confirm that there is a long-run relationship between growth, poverty and inequality. Notable results from the causality tests suggest that growth does not promote equal distribution of income in society but as income distribution begins to equalise, economic growth rises. This is regarded as growth--inequality disconnect. The unidirectional causality, which runs from income poverty to income inequality, suggests that a rising level of income poverty will lead to falling income inequality in the society; likewise, income inequality increases as non-income poverty declines.

Suggested Citation

  • Olusegun Ayodele Akanbi, 2016. "The growth, poverty and inequality nexus in South Africa: Cointegration and causality analysis," Development Southern Africa, Taylor & Francis Journals, vol. 33(2), pages 166-185, March.
    • Handle: RePEc:taf:deveza:v:33:y:2016:i:2:p:166-185
    DOI: 10.1080/0376835X.2015.1120654
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    Cited by:

    1. Phindile Mdluli & Precious Mncayi & Thabang Mc Camel, 2019. "Examining Factors that Drive Government Spending in South Africa," Proceedings of International Academic Conferences 9912246, International Institute of Social and Economic Sciences.
    2. Enisan Akinlo, Anthony, 2021. "Dynamic Linkages Between Government-Interventionists’ Policies, Growth, Inequality And Poverty In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(2), pages 45-64, June.

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