Is Rising Income Inequality Far from Inevitable During Structural Transformation? An Augmented Inequality Dynamics

Baek, Seung Jin

doi:10.2139/ssrn.2962302

Cited by 5 publications

(3 citation statements)

References 31 publications

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“…These studies therefore advocate for policymakers to strive for economic complexity as a tool for improving living conditions. However, other researchers argue that economic complexity may harm inclusive growth by exacerbating inequalities (Baek, 2017). For instance, Chu and Hoang (2020) find evidence that economic complexity widens income disparity gap in 88 countries.…”

Section: Empirical Literature On Economic Complexity and Iggmentioning

confidence: 99%

Does Economic Complexity Promote Inclusive Green Growth?

Gbolonyo,

Ofori,

Ojong

2024

Preprint

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Despite the growing scholarly attention concerning the effect of economic complexity (ECI) on inclusive growth and the environment, there remain some pertinent gaps in the literature. First, previous studies have not explored the effect of ECI on inclusive green growth (IGG). Second, prior contributions have not assessed the role of energy consumption (disaggregated into renewable and non-renewable) in the relationship between ECI and IGG. This study addresses these gaps by using macro data for 22 selected African countries. Robust evidence based on the dynamic system GMM and the Driscoll-Kraay standard errors estimators reveal that economic complexity promotes IGG. Additionally, the contingency analysis reveals that non-renewable energy diminishes the IGG-enhancing effect of ECI, whereas renewable energy amplifies it. Finally, when we decompose IGG into environmental and socioeconomic sustainability, we find that the ECI-energy consumption interaction has a greater effect on the latter rather than the former. We conclude that investments for boosting Africa's productive knowledge and renewable energy capacities are crucial for IGG. JEL Code: O44; O55; Q01; Q43; Q56

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Section: Empirical Literature On Economic Complexity and Iggmentioning

confidence: 99%

Does Economic Complexity Promote Inclusive Green Growth?

Gbolonyo,

Ofori,

Ojong

2024

Preprint

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“…Realising the aspirations of both agendas would thus require strengthened policymaking capacities to analyse the inter-and intra-sectoral impacts of policy initiatives (Willis, 2016). The interaction analysis is rendered more complicated by the fact that various intra-dynamics among the multi-dimensions of sustainable development have significantly affected the processes of structural transformation (Baek, 2017;. Indeed, there are three potential trade-offs and synergies within the sustainable development domain itself: economic growth versus social inclusion; economic growth versus environmental sustainability; and social inclusion versus environmental sustainability.…”

Section: Policymaking Capacity Matters Mostmentioning

confidence: 99%

Viewpoint: Cooperating in Africa’s sustainable structural transformation: policymaking capacity and the role of emerging economies

Baek

2019

International Development Planning Review

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Most African countries today are pursuing one or both of the following policy agendas as they strive towards a sustainable transition: 1) a global normative agenda moving away from traditional patterns of economic growth and toward a greater emphasis on sustainable development (2030 Agenda for Sustainable Development), and 2) a regional contextdependent development policy agenda that entails the achievement of a more radical structural transformation (Agenda 2063). Having identified these two overlapping policy agendas, both of which are aimed at moving away from an exclusive focus on economic growth, this article explores these development viewpoints with particular focus on capacity building in policymaking (the non-financial aspect), and the need for these to be further supported by more aggressive global partnership efforts (the financial aspect). By doing so, we are able to examine some transformation experiences in Africa as well as policy options that envisage greater inclusiveness, equality and sustainability.

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“…Kuznets (1955), using a dual economy model, argues that income inequality rises in the early stages of economic development following structural transformation. Recently, Baek (2017) states that structural transformation is not always associated with inclusive growth or prosperity for all as it may exacerbate inequalities.…”

Section: Introductionmentioning

confidence: 99%

Structural transformation—Income inequality nexus in Africa: Does the Developer's dilemma hold?

Ibrahim

Aluko

2020

Journal of Public Affairs

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This article examines the developer's dilemma—a seeming quandary emerging from the fact that developing countries simultaneously pursue two different developmental goals: (a) seeking economic development through structural transformation and (b) reducing income inequality. However, the proclivity of increasing income inequality while pursuing structural transformation is often referred to as the developer's dilemma. This study investigates for the presence of this dilemma in Africa using sample splitting and threshold estimation technique. While we find support for the existence of a developer's dilemma, suggesting that structural transformation induces income inequality, the income inequality‐widening effect is disproportionate.

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Is Rising Income Inequality Far from Inevitable During Structural Transformation? An Augmented Inequality Dynamics

Cited by 5 publications

References 31 publications

Does Economic Complexity Promote Inclusive Green Growth?

Does Economic Complexity Promote Inclusive Green Growth?

Viewpoint: Cooperating in Africa’s sustainable structural transformation: policymaking capacity and the role of emerging economies

Structural transformation—Income inequality nexus in Africa: Does the Developer's dilemma hold?

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