Drivers of income inequality in Africa: Does institutional quality matter?
Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
African Development Review
Abstract
This paper examines the role institutional quality plays among 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.
Description
Research Article
Keywords
Africa, control of corruption, income inequality, institutional quality, rule of law
Citation
Kunawotor ME, Bokpin GA, Barnor C. Drivers of income inequality in Africa: Does institutional quality matter? Afr Dev Rev. 2020;32:718–729. https://doi.org/10.1111/1467-8268.12473