Ethnic Diversity and Inequality in Sub-Saharan Africa: Do Institutions Reduce the Noise?

Studies on the causes of income differences between the rich and the poor have received an extensive attention in the inequality empirics. While ethnic diversity has also been identified as one of the fundamental causes of income inequality, the role of institutions as a mediating factor in the ethn...

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Bibliographic Details
Published in:Social indicators research 2019-10, Vol.145 (3), p.1033-1062
Main Authors: Ajide, Kazeem B., Alimi, Olorunfemi Y., Asongu, Simplice A.
Format: Article
Language:English
Subjects:
Attention
Ethnic Diversity
Ethnicity
Ethnolinguistics
Heterogeneity
Human Geography
Income
Income inequality
Inequality
Institutions
Low income groups
Microeconomics
Multiculturalism & pluralism
Noise
ORIGINAL RESEARCH
Political change
Public Health
Quality of Life Research
Social research
Social Sciences
Socioeconomics
Sociology
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Summary:Studies on the causes of income differences between the rich and the poor have received an extensive attention in the inequality empirics. While ethnic diversity has also been identified as one of the fundamental causes of income inequality, the role of institutions as a mediating factor in the ethnicity-inequality nexus has not received the scholarly attention it deserves. To this end, this study complements the existing literature by investigating the extent to which institutional framework corrects the noisy influence originating from the nexus between “ethnic diversity” and inequality in 26 sub-Saharan African countries for the period 1996–2015. The empirical evidence is based on pooled OLS, fixed effects and system GMM estimators. The main findings reveal that the mediating influences of institutional settings are defective, thus making it extremely difficult to modulate the noisy impacts of ethno-linguistic and religious heterogeneity on inequality. In addition, the negative influences orchestrated by ethno-linguistic and religious diversities on inequality fail to attenuate the impact of income disparity even when interacted with institutions. On the policy front, institutional reforms tailored toward economic, political and institutional governances should be targeted.
ISSN:0303-8300
1573-0921
DOI:10.1007/s11205-019-02122-y