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Inequality, poverty and quality of institutions: which freedom channels of globalization matter for Africa?

  • Asongu Simplice

    ()

    (Yaoundé/Cameroun)

Are formal institutions instrumental in the effect globalization mechanisms have on the human face? If so, through which freedoms channels are poverty and inequality mitigated? With the instrumentality of formal institutions: (1) de jure financial liberalization (KAOPEN) has a positive income-redistribution impact while the de facto measure (FDI) does not; (2) political liberalization has a disequalizing effect and; (3) economic freedom has a positive (negative) effect on inequality (poverty). Hence, economic freedom does not stop the wealthy from growing wealthier, but at the same time provides for conditions that mitigate poverty. The findings broadly show that, despite the substantially documented negative incidences of some channels of globalization on poverty (and inequality), formal institutions have the capacity to device policies that will give capital openness, trade and economic liberalizations a human face. Social implications and policy options are discussed.

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File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/Inequality-poverty-and-quality-of-institutions.-Which-freedom-channels-of-globalization-matter-for-Africa.pdf
File Function: Revised version, 2013
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Paper provided by African Governance and Development Institute. in its series Working Papers with number 13/014.

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Length: 19
Date of creation: 14 Jan 2013
Date of revision:
Publication status: Published: European Economics Letters
Handle: RePEc:agd:wpaper:13/014
Contact details of provider: Web page: http://www.afridev.org/index.php/en/
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  1. Arestis, Philip, et al, 2002. "The Impact of Financial Liberalization Policies on Financial Development: Evidence from Developing Economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 109-21, April.
  2. Asongu Simplice, 2011. "Investment and Inequality in Africa: which financial channels are good for the poor?," Working Papers 11/015, African Governance and Development Institute..
  3. Simplice A, Asongu, 2012. "Financial development dynamic thresholds of financial globalization: evidence from Africa," MPRA Paper 44254, University Library of Munich, Germany.
  4. Asongu, Simplice A, 2013. "How has politico-economic liberalization affected financial allocation efficiency? Fresh African evidence," MPRA Paper 44995, University Library of Munich, Germany.
  5. Enowbi Batuo, Michael & Guidi, Francesco & Mlambo, Kupukile, 2010. "Financial Development and Income Inequality: Evidence from African Countries," MPRA Paper 25658, University Library of Munich, Germany.
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  11. Simplice A, Asongu, 2011. "Law, democracy and the quality of government in Africa," MPRA Paper 35502, University Library of Munich, Germany.
  12. Kose, Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2006. "Financial Globalization: A Reappraisal," CEPR Discussion Papers 5842, C.E.P.R. Discussion Papers.
  13. Simplice A, Asongu, 2012. "Globalization and Africa: implications for human development," MPRA Paper 36541, University Library of Munich, Germany.
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  16. Asongu Simplice, 2011. "Finance and Inequality: Exploring Pro-Poor Investment Channels in Africa," Working Papers 11/016, African Governance and Development Institute..
  17. Michael Enowbi-Batuo & Mlambo Kupukile, 2010. "How can economic and political liberalisation improve financial development in African countries?," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 2(1), pages 35-59, May.
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  19. Sebastian Edwards, 1999. "How Effective are Capital Controls?," NBER Working Papers 7413, National Bureau of Economic Research, Inc.
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  22. Federico Varese, 1997. "The Transition to the Market and Corruption in Post-socialist Russia," Political Studies, Political Studies Association, vol. 45(3), pages 579-596.
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