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Working Paper 246 - Why is inequality high in Africa?

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Abstract

This paper computes asset-based inequality for 44 African countries in multiple waves using over a million household histories to study inequality between and within countries. It decomposed within country inequality into components deemed to represent opportunities and those attributed to individual efforts such as education. The between country inequality is negatively correlated with the proportion of households that completed tertiary education. Countries with high remittance flows also have lower inequality. Finally, assets or goods market distortions played an important role in driving inequality in Africa. Our results suggest that close to 40% of asset inequality within countries are due to inequality of opportunities with significant differences across countries. This component of inequality has been declining over time however. Political governance and ethnic fractionalization explained 25% of inequality in opportunities while level of development is uncorrelated with it. In addition, inequality of opportunity is strongly correlated with child and maternal mortality and other measures of disease burden.

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  • Shimeles Abebe & Tiguéné Nabassaga, 2017. "Working Paper 246 - Why is inequality high in Africa?," Working Paper Series 2355, African Development Bank.
    • Handle: RePEc:adb:adbwps:2355
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    Cited by:

    1. Boone, Catherine & Simson, Rebecca, 2019. "Regional inequalities in African political economy: theory, conceptualization and measurement, and political effects," Economic History Working Papers 100861, London School of Economics and Political Science, Department of Economic History.
    2. Boone, Catherine & Simson, Rebecca, 2019. "Regional inequalities in African political economy: theory, conceptualization and measurement, and political effects," LSE Research Online Documents on Economics 100861, London School of Economics and Political Science, LSE Library.
    3. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

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