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Income distribution and the potential of redistributive systems in Africa: a decomposition approach

Bargain, Olivier and Jara, H Xavier and Kwenda, Prudence and Ntuli, Miracle (2021) 'Income distribution and the potential of redistributive systems in Africa: a decomposition approach.' Journal of African Economies. ISSN 0963-8024

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Abstract

Redistributive systems in Africa are still in their infancy but are expanding in order to finance increasing public spending. This paper aims at characterizing the redistributive potential of six African countries: Ghana, Zambia, Mozambique, Tanzania, Ethiopia, and South Africa. These countries show contrasted situations in terms of income distribution. We assess the role of tax-benefit systems to explain these differences. Using newly developed tax-benefit microsimulations for all six countries, we produce counterfactual simulations whereby the system of the most (least) redistributive country is applied to the population of all other countries. In this way, we can decompose country differences in income distribution into the contribution of tax-benefit policies and the contribution of other factors (market income distribution, demographic structure, etc.). This analysis complements the recent literature on the redistributive role of socio-fiscal policies in developing countries and highlights the advantages of microsimulation and decomposition techniques to characterize how different African countries can learn from each other to improve social protection and reduce inequality

Item Type: Article
Uncontrolled Keywords: tax-benefit policy; microsimulation; inequality; poverty; Africa
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Institute for Social and Economic Research
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 26 Nov 2021 14:27
Last Modified: 11 Jan 2022 10:56
URI: http://repository.essex.ac.uk/id/eprint/31624

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