Search

A strand of the political economy literature emphasizes the effect of income inequality on growth and poverty, which materialises through redistribution. The theoretical expectation postulated by standard economic theory is that high inequality would lead to higher redistribution via the collective action of the median voter. The empirical literature testing the median voter theorem has been conducted in the context of industrialised economies. In this article, we examine the median voter hypothesis with specific reference to SSA, a region characterised by high levels of income inequality and limited redistribution. We adopt an instrumental variable approach to unpack the determinants and plausible mechanisms underpinning this relationship. In the article, we account for the effect of omitted top income earners in income inequality estimates, given their weight in the shape of the income distribution and their influence in redistributive policies. Overall, we find a positive relationship between inequality and redistribution in SSA, especially among middle-income countries. Further examination reveals that the abundance of natural resource rents seems to be the driving force affecting tax policy choices, which in turn exacerbates income inequality and undermines progressive redistribution. Thus, in assessing the relationship between inequality and redistribution, our results do not provide strong evidence to support the propositions of the median voter theorem, but instead, they call for alternative interpretations that seem to align more closely to the existence of multiple steady states. We are grateful to Théophile Azomahou, Gary Fields, Augustin K. Fosu, Njuguna Ndung’u, Yusi Ouyang, Abebe Shimeles, Erik Thorbecke, and seminar participants at the AERC meeting in November 2019 for helpful comments on earlier versions of this article. We are particularly grateful to the African Economic Research Consortium for financial support. Vanesa Jordá acknowledges partial financial support from the Fundación Ramón Areces (CISP20A6658).

There are multiple estimates of global monetary and multidimensional poverty, but there are still no estimates of\ud populations at risk of social exclusion worldwide. This\ud paper fills this gap by estimating the share and number of\ud populations at risk of exclusion globally and regionally. It\ud develops a conceptual framework of social exclusion that\ud builds on Sen’s capability approach and emphasizes the\ud relative, multidimensional, and dynamic features of exclusion. The paper also develops a macro counting measure of\ud population groups that are particularly vulnerable to exclusion based on identity, circumstances, and socioeconomic\ud conditions. The empirical strategy surveys the most reliable sources of vulnerable populations across countries and\ud develops a protocol to avoid double-counting of individuals\ud at risk of social exclusion. Overall, between 2.33 billion\ud and 2.43 billion people—roughly 32 percent of the global\ud population—are estimated to be at risk of being socially\ud excluded. The South Asia and East Asia and Pacific regions\ud contain 1.3 billion such people, with India and China alone\ud home to 840 million of them. Meanwhile, 52 percent of\ud Sub-Saharan Africa’s population is vulnerable to exclusion,\ud the greatest share of any region. The paper also discusses\ud several implications of these estimates, emphasizing that\ud policies targeting the poor might not be sufficient to tackle\ud social exclusion.

This paper investigates the impact of foreign aid on democratic outcomes using a panel of countries for the period between 1995 and 2018. In so doing, it speaks to a major critique of foreign aid, which is that it negatively impacts democratic governance. The analysis distinguishes between developmental aid and democracy aid, and examines democracy aid to specific sectors, in order to explore variation across different aid types. It draws on the Organisation for Economic Co-operation and Development's (OECD) Creditor Reporting System (CRS) data on foreign aid and indices of democracy from the Varieties of Democracy project, employing a combination of a maximum likelihood estimation and structural equation modelling (ML-SEM) model and fixed effects models. Overall, using a more extensive set of data and methods than previous analyses, we offer comprehensive evidence pointing to aid having a positive if modest impact on democratic outcomes. Our analysis suggests this effect is more significant for democracy aid than developmental aid, but there is no evidence of negative impact for either. These results are robust to multiple specifications.

This paper reviews the evidence on the effectiveness of active labour market programmes in low- and middle-income countries with high informality, highlighting examples of interventions that have been implemented in combination with other policies including social protection measures. In reviewing the literature, we adopt a scoping review methodology to identify studies that look at a range of programme outcomes including earnings, employment, formality and productivity. We include studies from 2000 onwards, and after a thorough selection and screening process we end up with 106 papers for the review. Most of these studies find some positive aspect associated with the programme under study, although significant positive aspects are in many cases contingent on a specific target population, or time frame of programme and evaluation. We employ a theory of change conceptual framework to further discuss the channels, mechanisms and assumptions that are seen to underpin programme effectiveness (or the lack of). Success often depends on specific contextual factors and/or the joint implementation of different types of active and/or passive labour market policies, including specific social protection measures or other public policies.