Financial Development and Income Inequality: Evidence from Latin America, 2001-2021

Samuel Jung, German Zarate-Hoyos — Tue, 10 Sep 2024 00:00:00 +0000

Numerous studies delve into the theoretical frameworks on finance and inequality. However, there are too few empirical tests on its theoretical relations due to a lack of data to capture financial development. Additionally, due to the many social and economic dimensions of a large economy such as Brazil or Argentina, it is unrealistic to consider that labor market or political issues are the only culprits of income inequality. More research is needed to understand the dynamics of inequality. In this paper, we evaluate the influence of financial development on income inequality using nineteen countries in Latin America from 2001 to 2021. Two indicators of financial development are employed. First, I use the broader definition of money, M3, as a percentage of GDP to capture the liquid liabilities because M1 or M2 may be a poor proxy in economies with weak financial systems. Secondly, the ratio of credit to private sector to GDP is employed because financial intermediaries with higher volumes of credit are more involved in financial development, such as diversifying risk, saving mobilization, facilitating transactions, allocating funding to economic activities, and monitoring borrowers’ activities. Based on the GMM estimator, our empirical findings support that better-developed financial markets reduce inequality.

What is the Cost? The Effect of the Post-Independence Government on Public Sector Performance in Namibia

Christopher Pomwene Shafuda, Utpal Kumar De — Fri, 27 Sep 2024 00:00:00 +0000

The end of colonisation in Sub-Saharan Africa did not bring the expected welfare to many. Several governments stumbled with public resource mismanagement, which created room for corruption and other malpractices (Good, 1994: Maipose, 2000: Ncholo, 2000: Tsatsu, 2015). This article examines the performance and efficiency of the Namibian government interventions between 1990 and 2020. The findings reveal that some indicators showed significant improvement, while some did not record any substantial improvement. Decent performance was recorded in government policies to reduce inequality and poverty. Good performance is also seen in policies improving education attainment, while policies to reduce unemployment performed poorly. Other indicators have shown mixed results. The results also revealed the worst performance during the first five years after independence. The period between 2016-2020 recorded poor government performance in most of the indicators. The findings suggest a need to improve performance and efficiency in the public sector.

Journal of Reviews on Global Economics

Financial Development and Income Inequality: Evidence from Latin America, 2001-2021

What is the Cost? The Effect of the Post-Independence Government on Public Sector Performance in Namibia