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Income Inequality and Redistribution In Sub-Saharan Africa

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  • Zarazua, Miguel Nino
  • Scaturro Francesca
  • Jorda, Vanesa
  • Tarp, Finn

Abstract

The theoretical expectation postulated by standard economic theory is that high inequality would lead to higher redistribution via the collective action of the median voter. In this paper, we adopt an instrumental variable approach to test the median voter hypothesis with specific reference to sub-Saharan Africa (SSA). Overall, we find a positive relationship between inequality and redistribution, especially among middle income countries, which is driven by the abundance of natural resource rents. Thus, our results do not provide strong evidence to support the median voter theorem, but instead, call for alternative interpretations, more closely to the existence of multiple steady states.

Suggested Citation

  • Zarazua, Miguel Nino & Scaturro Francesca & Jorda, Vanesa & Tarp, Finn, 2022. "Income Inequality and Redistribution In Sub-Saharan Africa," Working Papers 5594fa32-6d0a-49ef-ac18-6, African Economic Research Consortium.
    • Handle: RePEc:aer:wpaper:5594fa32-6d0a-49ef-ac18-6fdc47b08f5d
    Note: African Economic Research Consortium
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    Cited by:

    1. Lustig, Nora & Martinez Pabon, Valentina & Pessino, Carola, 2023. "Fiscal policy, income redistribution, and poverty reduction in Latin America," LSE Research Online Documents on Economics 120683, London School of Economics and Political Science, LSE Library.
    2. Lustig, Nora & Martinez Pabon, Valentina & Pessino, Carola, 2023. "Fiscal Policy, Income Redistribution, and Poverty Reduction in Latin America," IDB Publications (Working Papers) 13193, Inter-American Development Bank.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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