TY - JOUR
T1 - Drivers of income inequality in Africa
T2 - Does institutional quality matter?
AU - Kunawotor, Mark Edem
AU - Bokpin, Godfred Alufar
AU - Barnor, Charles
N1 - Publisher Copyright:
© 2020 African Development Bank
PY - 2020/12/1
Y1 - 2020/12/1
N2 - This paper examines the role institutional quality plays amongst the empirical drivers of income inequality in Africa. Using a dynamic two-step difference GMM with robust standard errors over the period 1990–2017, we find no statistically significant effect of institutions in general, on income inequality. However, we find that institutional quality indicators such as control of corruption and the strict enforcement of the rule of law significantly reduce income inequality. We also find no statistically significant effects of the other institutional quality indicators such as government effectiveness, voice and accountability, regulatory quality and political stability on income inequality in our sample. We suggest that more premium be placed on corruption control and the stringent adherence to the rule of law in ensuring equitable distribution of income in Africa. Furthermore, we re-echo suggestions that promote institutional development in Africa as institutions in general remain very weak.
AB - This paper examines the role institutional quality plays amongst the empirical drivers of income inequality in Africa. Using a dynamic two-step difference GMM with robust standard errors over the period 1990–2017, we find no statistically significant effect of institutions in general, on income inequality. However, we find that institutional quality indicators such as control of corruption and the strict enforcement of the rule of law significantly reduce income inequality. We also find no statistically significant effects of the other institutional quality indicators such as government effectiveness, voice and accountability, regulatory quality and political stability on income inequality in our sample. We suggest that more premium be placed on corruption control and the stringent adherence to the rule of law in ensuring equitable distribution of income in Africa. Furthermore, we re-echo suggestions that promote institutional development in Africa as institutions in general remain very weak.
KW - Africa
KW - control of corruption
KW - income inequality
KW - institutional quality
KW - rule of law
UR - http://www.scopus.com/inward/record.url?scp=85097619488&partnerID=8YFLogxK
U2 - 10.1111/1467-8268.12473
DO - 10.1111/1467-8268.12473
M3 - Article
AN - SCOPUS:85097619488
SN - 1017-6772
VL - 32
SP - 718
EP - 729
JO - African Development Review
JF - African Development Review
IS - 4
ER -