The Impact of Liberalisation Policies on Inequality in Africa
Journal of Economic Studies 42(1), pp. 68-100 (2014).
38 Pages Posted: 9 Sep 2014 Last revised: 1 Apr 2015
Date Written: June 8, 2012
Despite over three decades of Liberalisation policies in Africa, income-inequality has stayed persistently high. Using updated panel data of 26 African countries spanning the period 1996-2010, this study examines the effect of liberalisation policies with particular focus on financial, trade, institutional, political and economic liberalisations on income-inequality. We find: that financial liberalisation has a levitated income-redistributive effect with the magnitude of the de jure measure (KAOPEN) higher than that of the de facto measure (FDI); that exports, trade and ‘freedom to trade’ have an equality incidence on income-distribution; and that institutional and political liberalisation has a negative impact. We also find that, economic freedom has a negative income-redistributive effect possibly because of the weight of its legal component. The impact of these policies implications are discussed in detail in this study.
Keywords: Liberalisation Policies; Income Inequality; Poverty; Africa
JEL Classification: F30; F41; F50; O15; O55
Suggested Citation: Suggested Citation