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

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Micheal Batuo

University of Westminster

Date Written: June 8, 2012

Abstract

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

Asongu, Simplice and Batuo, Micheal, The Impact of Liberalisation Policies on Inequality in Africa (June 8, 2012). Journal of Economic Studies 42(1), pp. 68-100 (2014). . Available at SSRN: https://ssrn.com/abstract=2493293 or http://dx.doi.org/10.2139/ssrn.2493293

Simplice Asongu

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Micheal Batuo (Contact Author)

University of Westminster ( email )

309 Regent Street
London, W1R 8AL
United Kingdom

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