Inequalities and Growth in the Southern African Customs Union (SACU) Region

By Olivier Basdevant, Dalmacio Benicio, Yorbol Yakhshilikov

December 10, 2012

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Olivier Basdevant, Dalmacio Benicio, and Yorbol Yakhshilikov. Inequalities and Growth in the Southern African Customs Union (SACU) Region, (USA: International Monetary Fund, 2012) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper applies the work of Berg and Ostry (2011) to the SACU region, to identify how inequalities have played a role in growth in each of these countries, and elaborates policy options to mitigate the effects of inequalities and foster growth. Lower income inequalities could lead to significant gains, as SACU countries could almost double the duration of their growth periods, with much lower inequalities. While reducing inequalities may be desirable, the design of policies to achieve such objective is not trivial. Policies targeting income inequalities at the sources are expected to be the most effective to reduce inequalities and promote growth. However, direct redistribution, if carefully crafted can also be very effective in reducing inequalities while limiting its potentially negative impact on growth.

Subject: Education, Human capital, Income distribution, Income inequality, Labor, National accounts, Personal income

Keywords: Africa, Country, Gini coefficient, Growth, Growth in the Southern African Customs Union, Growth path, Human capital, Income, Income distribution, Income inequality, Inequalities, Investment, Personal income, SACU, SACU agreement, SACU country, SACU member, Swaziland, WP

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/290
Stock No:

WPIEA2012290
ISBN:

9781616359386
ISSN:

1018-5941

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