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Inequality, Economic Growth and Poverty in the Middle East and North Africa (MENA)
Author(s) -
Ncube Mthuli,
Anyanwu John C.,
Hausken Kjell
Publication year - 2014
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.12103
Subject(s) - economics , economic inequality , per capita income , poverty , exchange rate , per capita , population , investment (military) , foreign direct investment , consumption (sociology) , inequality , development economics , macroeconomics , economic growth , mathematical analysis , social science , demography , mathematics , sociology , politics , political science , law
In this paper, we have presented the patterns of inequality, growth and income inequality in the MENA region. Using a cross‐sectional time series data of MENA countries for the period 1985–2009, we have also investigated the effect of income inequality on key societal development, namely economic growth and poverty, in the region. Our empirical results show that income inequality reduces economic growth and increases poverty in the region. Other factors having significant negative effect on economic growth in the MENA region include previous growth rate, exchange rate, government consumption expenditure or government burden, initial per capita GDP, inflation and primary education. On the other hand, variables positively and significantly associated with MENA's economic growth are domestic investment rate, urbanization, infrastructure development, and mineral rent as a percentage of GDP. In addition, apart from income inequality, other factors increasing poverty in the region are foreign direct investment, population growth, inflation rate, and the attainment of only primary education. Poverty‐reducing variables in the region include domestic investment, trade openness, exchange rate, income per capita, and oil rents as a percentage of GDP.