IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/63797.html
   My bibliography  Save this paper

Middle class in Africa: Determinants and Consequences

Author

Listed:
  • Kodila-Tedika, Oasis
  • Asongu, Simplice A

Abstract

This study complements the inclusive growth literature by examining the determinants and consequences of the middle class in a continent where economic growth has been relatively high. The empirical evidence is based on a sample of 33 African countries for a 2010 cross-sectional study. OLS, 2SLS, 3SLS and SUR estimation techniques are employed to regress a plethora of middle class indicators, notably, the: floating, middle-class with floating, middle-class without floating, lower-middle-income and upper-middle-income categories. Results can be classified into two main strands. First, results on determinants broadly show that GDP per capita and education positively affect all middle class dependent variables. However, we have seen a negative nexus for the effect of ethnic fragmentation, political stability in general and partially for economic vulnerability. Simple positive correlations have been observed for: the size of the informal sector, openness and democracy. Second, on the consequences, the middle class enables the accumulation of human and infrastructural capital, while its effect is null on political stability and democracy in the short-run but positive for governance and modernisation. Policy implications are discussed.

Suggested Citation

  • Kodila-Tedika, Oasis & Asongu, Simplice A, 2014. "Middle class in Africa: Determinants and Consequences," MPRA Paper 63797, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:63797
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/63797/1/MPRA_paper_63797.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Elise Huillery, 2009. "History Matters: The Long-Term Impact of Colonial Public Investments in French West Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 176-215, April.
    2. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    3. Augustin Kwasi Fosu, 2010. "Inequality, Income, and Poverty: Comparative Global Evidence," Social Science Quarterly, Southwestern Social Science Association, vol. 91(5), pages 1432-1446, December.
    4. Augustin Kwasi Fosu, 2010. "Inequality, Income, and Poverty: Comparative Global Evidence," Social Science Quarterly, Southwestern Social Science Association, vol. 91(s1), pages 1432-1446.
    5. Simplice Asongu & Jacinta C. Nwachukwu & Gilbert A. A. Aminkeng, 2014. "China’s Strategies in Economic Diplomacy: A Survey of Updated Lessons for Africa, the West and China," Working Papers of the African Governance and Development Institute. 14/036, African Governance and Development Institute..
    6. Natalie Chun & Rana Hasan & Muhammad Habibur Rahman & Mehmet Ali Ulubaşoğlu, 2017. "The Role of Middle Class in Economic Development: What Do Cross-Country Data Show?," Review of Development Economics, Wiley Blackwell, vol. 21(2), pages 404-424, May.
    7. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
    8. Fosu, Augustin Kwasi, 2017. "Growth, inequality, and poverty reduction in developing countries: Recent global evidence," Research in Economics, Elsevier, vol. 71(2), pages 306-336.
    9. Montfort Mlachila & René Tapsoba & Sampawende J. A. Tapsoba, 2017. "A Quality of Growth Index for Developing Countries: A Proposal," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(2), pages 675-710, November.
    10. Ali Abdel Gadir Ali & Erik Thorbecke, 2000. "The State and Path of Poverty in Sub-Saharan Africa: some Preliminary Results," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 9(Supplemen), pages 9-40.
    11. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," Review of Economic Studies, Oxford University Press, vol. 68(4), pages 869-882.
    12. Ozgur Kaya & Ilker Kaya & Lewell Gunter, 2013. "Foreign Aid and the Quest for Poverty Reduction: Is Aid to Agriculture Effective?," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 583-596, September.
    13. Augustin Kwasi Fosu, 2008. "Inequality and the growth-poverty nexus: specification empirics using African data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(7), pages 563-566.
    14. Luis López-Calva & Eduardo Ortiz-Juarez, 2014. "A vulnerability approach to the definition of the middle class," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 23-47, March.
    15. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    16. Abhijit V. Banerjee & Esther Duflo, 2008. "What Is Middle Class about the Middle Classes around the World?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 3-28, Spring.
    17. Simplice A Asongu, 2012. "On the effect of foreign aid on corruption," Economics Bulletin, AccessEcon, vol. 32(3), pages 2174-2180.
    18. Mthuli Ncube & John C. Anyanwu & Kjell Hausken, 2014. "Inequality, Economic Growth and Poverty in the Middle East and North Africa (MENA)," African Development Review, African Development Bank, vol. 26(3), pages 435-453, September.
    19. Simplice Asongu, 2016. "Reinventing Foreign Aid For Inclusive And Sustainable Development: Kuznets, Piketty And The Great Policy Reversal," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 736-755, September.
    20. Abebe Shimeles & Mthuli Ncube, 2015. "The Making of the Middle-Class in Africa: Evidence from DHS Data," Journal of Development Studies, Taylor & Francis Journals, vol. 51(2), pages 178-193, February.
    21. Alwyn Young, 2012. "The African Growth Miracle," Journal of Political Economy, University of Chicago Press, vol. 120(4), pages 696-739.
    22. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    23. Cogneau, Denis & Moradi, Alexander, 2014. "Borders That Divide: Education and Religion in Ghana and Togo Since Colonial Times," The Journal of Economic History, Cambridge University Press, vol. 74(3), pages 694-729, September.
    24. Fosu, Augustin Kwasi, 2017. "Growth, inequality, and poverty reduction in developing countries: Recent global evidence," Research in Economics, Elsevier, vol. 71(2), pages 306-336.
    25. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    26. Fernando Borraz & Nicolás Gonzalez Pampillón & Máximo Rossi, 2011. "Polarization and the Middle Class," Documentos de Trabajo (working papers) 2011, Department of Economics - dECON.
    27. Simplice Asongu, 2014. "Globalization (fighting), corruption and development: How are these phenomena linearly and nonlinearly related in wealth effects?," Journal of Economic Studies, Emerald Group Publishing, vol. 41(3), pages 346-369, May.
    28. Denis COGNEAU, 2012. "The Political Dimension Of Inequality During Economic Development," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 35, pages 11-36.
    29. Augustin Kwasi Fosu, 2015. "Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 44-59, March.
    30. Simplice A. Asongu, 2012. "Law and Finance in Africa," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(4), pages 385-408.
    31. J.A. Agbor & J. W. Fedderke & N. Viegi, 2010. "How Does Colonial Origin Matter for Economic Performance in sub-Saharan Africa?," Working Papers 176, Economic Research Southern Africa.
    32. Kodila-Tedika, Oasis & Tcheta-Bampa, Albert, 2014. "Cold War and Institutional Quality: Some Empirical Evidence," MPRA Paper 53965, University Library of Munich, Germany.
    33. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2014. "Africa is on time," Journal of Economic Growth, Springer, vol. 19(3), pages 311-338, September.
    34. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    35. Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 747-793.
    36. Kalwij, Adriaan & Verschoor, Arjan, 2007. "Not by growth alone: The role of the distribution of income in regional diversity in poverty reduction," European Economic Review, Elsevier, vol. 51(4), pages 805-829, May.
    37. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    38. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
    39. repec:dau:papers:123456789/4563 is not listed on IDEAS
    40. Juliet U. Elu & Linda Loubert, 2013. "Earnings Inequality and the Intersectionality of Gender and Ethnicity in Sub-Saharan Africa: The Case of Tanzanian Manufacturing," American Economic Review, American Economic Association, vol. 103(3), pages 289-292, May.
    41. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December.
    42. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
    43. Augustin Kwasi Fosu, 2015. "Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 44-59, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asongu, Simplice A & Odhiambo, Nicholas M, 2019. "Income levels,governance and inlusive human development in Sub-Saharan Africa," Working Papers 25589, University of South Africa, Department of Economics.
    2. Simplice A. Asongu & Paul N. Acha-Anyi, 2020. "A survey on the Washington Consensus and the Beijing Model: reconciling development perspectives," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(2), pages 111-129, June.
    3. Simplice A. Asongu, 2015. "Growth and Institutions in African Development by Augustin K. Fosu," Research Africa Network Working Papers 15/033, Research Africa Network (RAN).
    4. Simplice A. Asongu & Ivo J. Leke, 2019. "External flows and inclusive human development in Sub-Saharan Africa," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 5(1), pages 33-56.
    5. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Mobile Phone Penetration, Mobile Banking and Inclusive Development in Africa," The African Finance Journal, Africagrowth Institute, vol. 18(1), pages 34-52.
    6. Jean-Philippe Berrou & Dominique Darbon & Christian Bouquet & Anne Bekelynck & Matthieu Clément & François Combarnous & Eric Rougier, 2018. "Le réveil des classes moyennes ivoiriennes ? Identification, caractérisation et implications pour les politiques publiques," Post-Print hal-02147840, HAL.
    7. Simplice A. Asongu & Joseph Nnanna, 2020. "Inclusive Human Development in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 20/014, African Governance and Development Institute..
    8. Jean-Philippe Berrou & Dominique Darbon & Christian Bouquet & Anne Bekelynck & Matthieu Clément & François Combarnous & Eric Rougier, 2018. "Le réveil des classes moyennes ivoiriennes ? Identification, caractérisation et implications pour les politiques publiques," Working Papers hal-02147840, HAL.
    9. Simplice A. Asongu & Oasis Kodila-Tedika, 2018. "Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(1), pages 99-117, August.
    10. Simplice Asongu & Sara le Roux, 2018. "Understanding Sub-Saharan Africa’s Extreme Poverty Tragedy," Working Papers of the African Governance and Development Institute. 18/012, African Governance and Development Institute..
    11. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    12. Simplice A. Asongu & Nicholas M. Odhiambo, 0. "Income Levels, Governance and Inclusive Human Development in Sub-Saharan Africa," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 0, pages 1-33.
    13. Jean-Philippe Berrou & Damien Girollet, 2019. "A la recherche des « gazelles » du secteur informel urbain africain. Entreprises et entrepreneurs à fort potentiel dans leur environnement socioéconomique et numérique," Working Papers hal-02507441, HAL.
    14. Simplice A. Asongu & Sara le Roux, 2018. "Understanding Sub-Saharan Africa’s Extreme Poverty Tragedy," Research Africa Network Working Papers 18/012, Research Africa Network (RAN).
    15. Jean-Philippe BERROU, 2018. "Le réveil des classes moyennes ivoiriennes ? Identification, caractérisation et implications pour les politiques publiques," Working Paper 6e6633ec-f96a-4f9f-a240-7, Agence française de développement.

    More about this item

    Keywords

    Poverty; Inequality; Middle class; Africa;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:63797. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.