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The impact of liberalisation policies on income inequality in african countries

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  • Enowbi Batuo, Michael
  • Asongu, Simplice A.

Abstract

Despite over three decades of Liberalisation policies in Africa, income-inequality has stayed persistently high. Using updated panel data of 26 African countries spanning the period 1996-2010, this study examines the effect of liberalisation policies with particular focus on financial, trade, institutional, political and economic liberalisations on income-inequality. We find: that financial liberalisation has a levitated income-redistributive effect with the magnitude of the de jure measure (KAOPEN) higher than that of the de facto measure (FDI); that exports, trade and ‘freedom to trade’ have an equality incidence on income-distribution; and that institutional and political liberalisation has a negative impact and we also find that, economic freedom has a negative income-redistributive effect possibly because of the weight of its legal component. The impact of these policies implications are discussed in detail in this study.

Suggested Citation

  • Enowbi Batuo, Michael & Asongu, Simplice A., 2012. "The impact of liberalisation policies on income inequality in african countries," MPRA Paper 43344, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:43344
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    More about this item

    Keywords

    Liberalisation Policies; Income Inequality; Poverty; Africa;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F3 - International Economics - - International Finance
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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