Affiliation:
1. Department of Economics University of South Africa Pretoria South Africa
Abstract
AbstractThe present study investigates the incidence of financial institutions' dynamics of depth and access in the effect of income inequality on poverty and the severity of poverty in 42 sub‐Saharan African countries from 1980 to 2019. The Gini index is used to measure income inequality while poverty is measured as the poverty headcount ratio, and the severity of poverty is generated as the square of the poverty gap index. An interactive quantile regression approach is used as an empirical strategy. Income inequality unconditionally increases poverty dynamics while the financial institutions' depth and access mitigate the adverse effects of income inequality on poverty dynamics. Financial institutions' policy thresholds or minimum financial institution levels needed to completely dampen the adverse effects of income inequality on poverty dynamics are provided. The findings are contingent on existing levels of poverty, poverty measurement, and proxies for financial institutions. Policy implications are discussed.Related ArticlesAbdulai, Abdul‐Gafaru, Justice Nyigmah Bawole, and Emmanuel Kojo Sakyi. 2018. “Rethinking Persistent Poverty in Northern Ghana: The Primacy of Policy and Politics over Geography.” Politics & Policy 46(2): 233–62. https://doi.org/10.1111/polp.12250.Adegboye, Alex, Kofo Adegboye, Uwalomwa Uwuigbe, Stephen Ojeka, and Eyitemi Fasanu. 2023. “Taxation, Democracy, and Inequality in Sub‐Saharan Africa: Relevant Linkages for Sustainable Development Goals.” Politics & Policy 51(4): 696–722. https://doi.org/10.1111/polp.12547.Nchofoung, Tii, Simplice Asongu, Vanessa Tchamyou, and Ofeh Edoh. 2022. “Gender, Political Inclusion, and Democracy in Africa: Some Empirical Evidence.” Politics & Policy 51(1): 137–55. https://doi.org/10.1111/polp.12505.
Subject
Political Science and International Relations,Sociology and Political Science
Reference63 articles.
1. A Theory of Trickle-Down Growth and Development
2. Aikins R. Enich andJaccobusduToit Mclachlan.2022.“Africa Is Losing the Battle against Extreme Poverty.”Institute for Security Studies.https://issafrica.org/iss‐today/africa‐is‐losing‐the‐battle‐against‐extreme‐poverty.
3. Measuring Acute Poverty in the Developing World: Robustness and Scope of the Multidimensional Poverty Index