Role of Initial Inequalities in Pro-Poor Growth. A Panel Smooth Transition Approach in Sub-Saharan Africa context
Dr Troupa Sery Guy Flavien

The prominent role of inequality in determining the effectiveness of growth on poverty reduction is no longer debated. This study aims to contribute to the understanding of this relationship looking at the case of 23 countries in sub-Saharan Africa over the period 1991-2017. Using data from POVCALNET of the World Bank, the study analyses the non-linearity and heterogeneity of the poverty-growth-inequality relationship using a Panel Smooth Transition Regression (PSTR) model. It finds that growth is pro-poor provided that initial inequality is low and that GDP is adjusted for the influences of inequality regardless of the level of development and initial poverty level of countries. The implication of this result is that measures to accompany growth and poverty reduction policies should be reinforced by specific measures aimed at having a more evident control over inequalities. Further studies to gain a better understanding of the structure and determinants of inequality in different contexts are needed.

Full Text: PDF     DOI: 10.15640/jeds.v8n3a1