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Towards Building Shared Prosperity in Sub-Saharan Africa: How Does the Effect of Economic Integration Compare to Social Equity Policies?

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  • Ofori, Isaac Kwesi
Abstract
The debate on the need for Sub-Saharan African (SSA) countries to foster inclusive growth has intensified following the coming into force of the African Continental Free Trade Area (AfCFTA), and the emergence of the coronavirus pandemic. A conspicuous lacuna in the literature is a lack of rigorous empirical work(s) exploring: (1) the joint effect of economic integration and resource allocation, and (2) social equity policies on inclusive growth in SSA. Using data from the World Bank's World Development Indicators and the Global Consumption and Income Project (1980-2019) for 43 SSA countries, I provide evidence robust to several econometric techniques the fixed-effect, random-effect, and the system generalized method of moments estimators to show that: (1) though economic integration induces inclusive growth, the effect is higher in the presence of greater financial deepening and productive government expenditure; (2) relative to economic integration, social equity policies are rather remarkable in enhancing inclusive growth. Policy recommendations are provided in line with the AfCFTA and the reversals of welfare gains due to the coronavirus pandemic.

Suggested Citation

  • Ofori, Isaac Kwesi, 2021. "Towards Building Shared Prosperity in Sub-Saharan Africa: How Does the Effect of Economic Integration Compare to Social Equity Policies?," EconStor Preprints 235483, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:235483
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    References listed on IDEAS

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    Cited by:

    1. Ofori, Isaac K. & Asongu, Simplice A., 2022. "Repackaging FDI for Inclusive Growth: Nullifying Effects and Policy Relevant Thresholds of Governance," MPRA Paper 111359, University Library of Munich, Germany.
    2. Pamela E. Ofori & Simplice A. Asongu & Vanessa S. Tchamyou, 2021. "The Synergy between Governance and Economic Integration in Promoting Female Economic Inclusion in Sub-Saharan Africa," Working Papers 21/071, European Xtramile Centre of African Studies (EXCAS).
    3. Pamela E. Ofori & Simplice A. Asongu & Vanessa S. Tchamyou & Raufhon Salahodjaev, 2023. "The Synergy between Governance and Trade Openness in Promoting Female Economic Inclusion in Sub-Saharan Africa," Working Papers 23/001, European Xtramile Centre of African Studies (EXCAS).
    4. Ofori, Isaac K. & Dossou, Marcel A.M. & Asongu, Simplice A. & Armah, Mark K., 2023. "Bridging Africa’s income inequality gap: How relevant is China’s outward FDI to Africa?," Economic Systems, Elsevier, vol. 47(1).
    5. Ofori, Isaac K. & Armah, Mark K. & Taale, Francis & Ofori, Pamela E., 2021. "Addressing the Severity and Intensity of Poverty in Sub-Saharan Africa: How Relevant is the ICT and Financial Development Pathway?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    6. Isaac K. Ofori & Toyo A. M. Dossou & Simplice A. Asongu & Mark K. Armah, 2021. "Bridging Africa’s Income Inequality Gap: How Relevant Is China’s Outward FDI to Africa?," Working Papers of the African Governance and Development Institute. 21/098, African Governance and Development Institute..

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    More about this item

    Keywords

    AfCFTA; Economic Integration; Financial Deepening; Globalisation; Inclusive Growth; Sub-Saharan Africa; Social Protection; Social Inclusion;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F6 - International Economics - - Economic Impacts of Globalization
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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