Inequalities and Growth in the Southern African Customs Union (SACU) Region

23 Pages Posted: 11 Jan 2013

See all articles by Olivier Basdevant

Olivier Basdevant

International Monetary Fund (IMF) - IMF Institute; Government of New Zealand - Department of Economics

Dalmacio Benicio

affiliation not provided to SSRN

Yorbol Yakhshilikov

International Monetary Fund (IMF)

Date Written: December 2012

Abstract

This paper applies the work of Berg and Ostry (2011) to the SACU region, to identify how inequalities have played a role in growth in each of these countries, and elaborates policy options to mitigate the effects of inequalities and foster growth. Lower income inequalities could lead to significant gains, as SACU countries could almost double the duration of their growth periods, with much lower inequalities. While reducing inequalities may be desirable, the design of policies to achieve such objective is not trivial. Policies targeting income inequalities at the sources are expected to be the most effective to reduce inequalities and promote growth. However, direct redistribution, if carefully crafted can also be very effective in reducing inequalities while limiting its potentially negative impact on growth.

Keywords: Economic growth, Southern Africa, Income distribution, Cross country analysis, Growth, Inequalities, SACU

JEL Classification: E24, O15, O47

Suggested Citation

Basdevant, Olivier and Benicio, Dalmacio and Yakhshilikov, Yorbol, Inequalities and Growth in the Southern African Customs Union (SACU) Region (December 2012). IMF Working Paper No. 12/290, Available at SSRN: https://ssrn.com/abstract=2199303

Olivier Basdevant (Contact Author)

International Monetary Fund (IMF) - IMF Institute ( email )

700 19 th Street NW
Washington, DC 20431
United States

Government of New Zealand - Department of Economics ( email )

2 The Terrace
P.O. Box 2498
Wellington
New Zealand

Dalmacio Benicio

affiliation not provided to SSRN

No Address Available

Yorbol Yakhshilikov

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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