Worlds Apart: What polarization measures reveal about Sub-Saharan Africa’s growth and welfare distribution in the last two decades

An African Centre of Excellence for Inequality Research (ACEIR) Working Paper, No. 1, 2019.

Sub-Saharan Africa’s development path over the past two decades has been characterized by sluggish poverty reduction occurring alongside robust economic growth. While in this context we would expect inequality to increase, standard synthetic measures provide little evidence of a generalizable uptick in inequality over this period. We argue that the standard empirical toolkit available to development economists working on SSA has limited our ability to understand the role that distributional change plays in the persistence and reproduction of poverty on the continent. For this reason, we propose that supplementing inequality measures with the analysis of polarization provides a cleaner distributional lens through which to make sense of SSA’s poverty performance during this period of growth. Applying polarization measures to comparable survey data from 24 Sub-Saharan African countries, we find that there has been a generalizable increase in polarization over the past two decades – and in particular, an increased concentration of households in the lower tail of the relative distribution. That this inegalitarian trend is overlooked when using standard synthetic inequality measures confirms our hypothesis that our current toolkit represents a technical bottleneck to understanding the effects of distributional trends on poverty reduction in Sub Saharan Africa – and that polarization analysis may help overcome this.

Handbook on Inequality Measurement for Country Studies

An ACEIR research resource produced by Muna Shifa and Vimal Ranchhod, Southern Africa Labour and Development Unit (SALDRU), University of Cape Town, 2019.

Undertaking a country-level study on inequality can be a challenging task. Researchers are faced by questions on how to conceptualise such a study; what needs to be included; and what sorts of analyses are required. With these challenges in mind, this handbook was written primarily as a reference document to guide researchers who are embarking on a research report that summarises inequality within a given country-level context. While the handbook will help researchers with limited experience of undertaking such a study, they will need some understanding of data manage­ment and the ability to work with the statistical analysis software Stata. They also need some awareness of the general socio-economic envi­ronment that their study is located in; and be knowledgeable about the various surveys and alter­native data sources that can be used for their study.