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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Empirical analysis of the key drivers of income inequality in West Africa
Authors:Anyanwu, John C.ISNI
Erhijakpor, Andrew E.O.
Obi, Emeka
Periodical:African Development Review (ISSN 1467-8268)
Geographic term:West Africa
Subjects:income distribution
economic models
External link:https://doi.org/10.1111/1467-8268.12164
Abstract:This paper extends and contributes to the literature on the drivers of income inequality in West Africa. Principally, it empirically assesses the impact of key domestic and external drivers of income inequality with a view to drawing key lessons for West African countries. Using the dynamic system GMM estimation procedure, the authors analyze an unbalanced pooled time series data set of income distribution in 17 West African countries from 1970 to 2011. The inequality measures, the market (gross) and net income inequality coefficients, are from a global inequality dataset, which ensures data comparability both through time and across countries. Findings show strong support for a dynamic, non-monotonic, inverted U-shaped, effect of inequality in the model (as expressed by the lagged values of income inequality). The authors find evidence of existence of the Kuznets curve in the sub-region, which proposed that inequality may rise with the initial increase in per capita income but will decline subsequently. A non-monotonic, Kuznets-type effect is found for political globalization. The results also show that access to secondary education (skill premium) social globalization, age dependency (for net income inequality) and democracy strongly and significantly equalize income in West Africa. The authors find that population density, natural resources dependence, domestic investment rate, government consumption expenditure, trade openness, inward foreign direct investment, international remittances, and civil conflicts appear to be income disequalizing in the sub-region. The policy lessons and implications are discussed. Bibliogr., sum. [Journal abstract]