Towards the quest to reduce income inequality in Africa: is there a synergy between tourism development and governance?

Abstract

Despite the growing attention on the tourism development-income inequality nexus, a conspicuous gap in the literature is that rigorous empirical works examining how good governance moderates the relationship is hard to find. Anchoring on the trickle-down theory and the tourism-led growth hypothesis, this study fills this void in the literature based on data for 48 African countries for the period 1996 -2020. We provide strong evidence robust to several specifications from the GMM estimator to show that, though unconditionally both tourism development and governance reduce income inequality in Africa, the effect of the former is amplified in the presence of quality economic, political and institutional governance.Particularly, we find that control of corruption and political are keys for propelling Africa's tourism sector contribute to policymakers' quest of fostering shared prosperity in the continent.Policy recommendations are provided in line with SDG 10 and Aspiration 1 and 3 of Africa's Agenda 2063.

Economic Globalisation and Inclusive Green Growth in Africa: Contingencies and Policy-Relevant Thresholds of Governance

“…Additionally, the dynamic GMM estimator is suitable as it addresses potential endogeneity concerns in this study. In our study, endogeneity is apparent due to: (i) the possible bi-causal relationship between institutions and economic development (Ofori et al, 2022b;World Bank, 2012;Kaufmann et al, 2010), and financial development and inclusive growth (Ofori et al, 2022c;Ofori et al, 2022d). Further, the introduction of 𝑰𝑰𝑰𝑰𝑰𝑰 𝒊𝒊𝒊𝒊−𝟏𝟏 , 𝑰𝑰𝑮𝑮𝑰𝑰 𝒊𝒊𝒊𝒊−𝟏𝟏 𝑰𝑰𝑰𝑰𝑰𝑰𝑮𝑮𝑰𝑰𝑰𝑰𝑮𝑮 𝒊𝒊𝒊𝒊−𝟏𝟏 in their respective models raises the concern of endogeneity (see Obeng et al, 2022;Ofori et al, 2020e).…”

Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion, and financial development

“…Alternatively, we check the robustness of our estimates using the Palma ratio 17 and GDP per capita. The choice of these two inclusive growth indicators for robustness checks follows the absolute and relative lenses through which propoor growth is measured (see, Ofori et al 2022aOfori et al , 2022bIMF 2011;Berg and Ostry 2011;Ravallion and Chen 2004). On the variables of interest-ICT diffusion, financial development and access, we capture the former by three indicators (access, usage and skills), and the latter by the IMF's financial development index (Svirydzenka 2016).…”

Towards Inclusive Green Growth in Africa: Critical Energy Efficiency Synergies and Governance Thresholds

“…In the presence of the aforementioned estimation concerns, competing techniques such as the fixed random effect and the first-difference GMM estimator are also not appropriate. In light of these issues, this study applies the Blundell and Bond (1998) two-stem GMM estimator Additional caveats for applying the system GMM estimator are that: (i) the number of sample countries (i.e., N) used in the study are greater than the number of time periods in each cross-section (i.e., T) (see Ofori et al 2022bOfori et al , 2022c, and…”

“…Accordingly, we follow Ofori et al (2022b) transform Equation ( 14) into Equations ( 17) and ( 18) to capture the level and first-difference specifications, which encapsulate the dynamic system estimation method 9 :…”