Inclusive growth in Africa: Do fiscal measures matter?

Figures & data

Figure 1. Poverty and income inequality in selected African countries.

Source: World Bank PovcalNet & World Inequality Database.

Table 1. Data description

Variable	Description	Source
Pov	Share of the population in extreme poverty	World Bank PovcalNet
Gini	Gini-coefficient measure of inequality which ranges from 0 to 1.	World Inequality Database
Top1	Share of income of the top 1% in a country.
Top10	Share of income of the top 10% in a country.
Mid40	Share of income of the middle 40% in a country.
Bot50	Share of income of the bottom 50% in a country.
tax	Tax to GDP ratio
Debts	Debt service on external debt (US $)	World Development Indicators
Gov.	General government final consumption expenditure (% of GDP)
IQ	A Principal component of world governance indicators (includes voice & accountability, political stability, government effectiveness, rule of law, and control of corruption)
remit	Remittances from citizens abroad (US $)
ICT	Individuals using the Internet (% of the population)

Table 2. Descriptive statistics

Variable	Obs	Mean	Std. Dev.	Min	Max
pov	1,185	40.00	25.11	0.13	95.29
gini	1,272	0.62	0.06	0.49	0.84
Top1	1,272	0.17	0.05	0.09	0.64
Top10	1,272	0.51	0.07	0.38	0.80
mid40	1,272	0.36	0.04	0.15	0.43
bot50	1,272	0.12	0.03	0.05	0.19
IQ	1,324	0.00	2.19	−6.26	5.52
debts	1,189	0.59	1.14	−7.16	4.09
remit	1,086	18.57	2.24	9.35	24.11
ICT	1,262	10.30	15.44	0.00	84.12

Source: Author’s computation from sourced data.

Table 3. Inclusive growth (poverty)

VARIABLES	model1	model2	model3
Pov(−1)	0.391***	0.733***	0.714***
	(0.0596)	(0.0404)	(0.0585)
debts	2.830***
	(0.604)
expd		0.372***
		(0.130)
taxtogdp			−0.340*
			(0.201)
IQ	−3.881***	−1.249*	−0.907
	(0.813)	(0.668)	(1.246)
internet	−0.328***	−0.195***	−0.119*
	(0.0837)	(0.0503)	(0.0619)
remit	−0.209	0.0257	−0.423
	(0.334)	(0.296)	(0.447)
gdp	−0.850	−0.123	0.132
	(0.637)	(0.575)	(0.516)
Constant	48.12***	7.471	21.14**
	(12.94)	(10.63)	(9.846)
AR2^1	0.2	0.16	0.08
Hansen	0.62	0.36	0.40

Standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1.

DV:Poverty.

Figure 2. Relationship between poverty and tax-to-GDP ratio in Africa.

Table 4. Inclusive growth (Gini)

VARIABLES	model1	model2	model3
gini(−1)	1.080***	1.121***	0.960***
	(0.0241)	(0.0210)	(0.0582)
debts	0.00225***
	(0.000812)
expd		−0.00105***
		(0.000358)
taxtogdp			0.00116*
			(0.000694)
IQ	−0.00377***	8.86e-05	−0.00845**
	(0.00106)	(0.00128)	(0.00368)
internet	0.000203**	0.000168**	0.000338**
	(8.37e-05)	(8.08e-05)	(0.000136)
remit	−0.000709*	−0.000707*	−0.00121
	(0.000398)	(0.000430)	(0.000739)
gdp	0.00266***	0.00115	0.00355***
	(0.000674)	(0.00116)	(0.00118)
Constant	−0.101***	−0.0750**	−0.0570
	(0.0173)	(0.0314)	(0.0385)
AR2	0.58	0.23	0.32
Hansen	0.20	0.16	0.51

Standard errors in parentheses. *** p < 0.01, ** p < 0.05, * p < 0.1.

DV: Gini.

Table 5. Income shares and fiscal measures

VARIABLES	model1	model2	model3	model4
L.Top1	0.822***
	(0.0504)
L.Top10		1.086***
		(0.0419)
L.mid40			1.028***
			(0.0502)
L.bot50				1.060***
				(0.0394)
taxtogdp	0.00129	0.00152**	−0.00107*	−0.000837***
	(0.000976)	(0.000677)	(0.000641)	(0.000290)
ldebtsev	0.00626***	0.00351***	−0.00279***	−0.00100**
	(0.000655)	(0.00125)	(0.000865)	(0.000435)
ggep	0.00134***	−0.00248***	0.00187***	0.00102***
	(0.000444)	(0.000900)	(0.000507)	(0.000319)
insti1	−0.00825	−0.00607	0.00407	0.00354**
	(0.00509)	(0.00413)	(0.00300)	(0.00147)
internet	−0.000118	0.000331**	−0.000211**	−0.000164***
	(0.000170)	(0.000165)	(0.000105)	(5.65e-05)
lremit	−0.00183*	0.000279	6.60e-05	0.000270
	(0.000994)	(0.000738)	(0.000593)	(0.000286)
lgdp	0.00188	−0.000457	0.000725	0.000106
	(0.00242)	(0.00141)	(0.000839)	(0.000571)
Constant	−0.0212	−0.0301	−0.0368	−0.0149
	(0.0546)	(0.0509)	(0.0225)	(0.0142)
AR2	0.55	0.81	0.89	0.06
Hansen	0.65	0.3	0.42	0.22

Standard errors in parentheses, *** p < 0.01, ** p < 0.05, * p < 0.1

Figure 3. Relationship between Gini and tax-to-GDP ratio in Africa.