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An econometric analysis of the bifurcation of within-country inequality trends in Sub-Saharan Africa, 1990–2011

Author

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  • Giovanni Andrea Cornia

    (University of Florence)

Abstract

The paper documents and explains the income inequality changes that have occurred in Sub-Saharan Africa over 1991-2011. After reviewing the causes of post-Independence income polarization, it shows that during the 2000s 17 countries recorded an inequality decline and 12 a rise. The paper then explores the determinants of this trend bifurcation by reviewing the changes recorded in a long list of inequality determinants and by testing their relevance by means of a multivariate macro-panel regression. The results indicate that the growth rate of GDP/capita is unrelated to inequality while its composition is closely associated with it. Improvements in the distribution of human capital improved inequality while lack of land reforms and high population growth increased it. Changes in global conditions had a mixed effect. While remittances and rising world agricultural prices appear to have been equalizing, rising FDI in extractive industries and a surge of terms of trade in resource-rich economies were regressive. ODA changes were statistically non-significant, but debt cancellation in HIPC-eligible countries reduced the Gini perceptibly. Domestic policy changes had a mixed effect. Where direct taxation and targeted social expenditure rose the impact on inequality was favourable. Among the macro-policies, trade liberalization was un-equalizing as it reduced the value added share of manufacturing, while a stable macroeconomy, fall in inflation and competitive exchange rate reduced income polarization. Exogenous shocks generated contrasting effects: the recent fall in HIV/AIDS incidence reduced inequality modestly, while conflict intensity increased it. Our estimates do not find a clear distributive effect of democratization. The paper concludes stressing the need to strengthen the informational basis to analyse various aspects of inequality, and to improve our understanding of the politics of distributive policies.
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Suggested Citation

  • Giovanni Andrea Cornia, "undated". "An econometric analysis of the bifurcation of within-country inequality trends in Sub-Saharan Africa, 1990–2011," UNDP Africa Policy Notes 2016-04, United Nations Development Programme, Regional Bureau for Africa.
    • Handle: RePEc:rac:wpaper:2016-04
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    Cited by:

    1. Mihai Mutascu & Albert Lessoua & Nicolae Bogdan Ianc, 2024. "Public debt and inequality in Sub-Saharan Africa: the case of EMCCA and WAEMU countries," Economic Change and Restructuring, Springer, vol. 57(5), pages 1-44, October.
    2. Cornia Giovanni Andrea, 2018. "Eradicating Poverty by the Year 2030: Implications for Income Inequality, Population Policies, Food Prices (and Faster Growth?)," Journal of Globalization and Development, De Gruyter, vol. 9(2), pages 1-21, December.
    3. Bach, Maria & Morgan, Mary S., 2020. "Measuring difference? The United Nations’ shift from progress to poverty," LSE Research Online Documents on Economics 101769, London School of Economics and Political Science, LSE Library.

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    Keywords

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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