Tag Archives: Income Inequality

Rethinking the effectiveness of fiscal allocation strategy: A focus on economic development in Nigeria (Published)

This paper developed and estimated two autoregressive distributed lag (ARDL) models to explore the empirical relationship between fiscal policy allocation strategies and economic development in Nigeria. Specifically, the impacts of public expenditures on social and community services, economic services and administration on poverty headcount and income inequality were examined between 1990 and 2017. The unit root test results show that the variables are mixed integrated.  The ARDL bounds test results revealed that long run relationship exists among the variables in each of the models. The ARDL estimates reveal that public capital expenditure on economic services in addition to expenditure on social and economic services have significant positive impact on poverty headcount in the short run. The result further indicates that expenditure on administration negatively influenced the poverty level. More so, expenditure on economic services and income inequality are relatively related in the short run while public expenditure on social and community services play significant in reducing income inequality in both short and long run. Therefore, it is recommended that fiscal policy allocation should made adequate provision for investments in social and economic services in order to create better opportunities for everyone in a view to reducing the income divide within the Nigerian economy.

Keywords: ARDL and Nigeria, Fiscal Policy, Income Inequality, Poverty, public investments

BRAZIL’S INNOVATIVE ANTI-POVERTY& INEQUALITY MODEL (Published)

Introduction: Poverty and income inequality were two main problems of Brazil. In order to solve these problems Brazil have taken different policy initiatives. The economists call it an innovative anti-poverty and inequality model. Objectives: The objectives of this paper is to study different aspects of Brazilian innovative anti-poverty and inequality model and its impact on Brazilian society. Another objective to study is whether this model is specification in its applicability or it may be applied on other medium-income economies because income inequality and poverty are the common problems of almost all developing countries. Methodology of study: This is a qualitative research study in which we have studied different characteristics in general terms and policies introduced by Brazilian government during 2000-2010 period. We have used secondary data extracted from the database of IMF, World Bank, US Federal Reserves, US Bureau of Economic Analysis and relevant journals. Findings & Results: Our study finds hat poverty in Brazil has reduced from 17 percent in 2000 to 8 percent in 2010. The evidence also shows that the wealth of the richest 20 percent of upper class was decreased during 2000-2010 due to high tax rates payment and the income of lowest 20 percent quintile was increased from 2.6 percent to 3.5 percent in the same period. It shows that the income of lower class was increased while the wealth and income of upper class was decreased during 2000-2010. The study also reveals that about half of poor segment of Brazilian population has come out of poverty trap in a short span of just 10 years.

Keywords: : Emerging Economies, Income Inequality, Poverty Alleviation

ROLE OF POLICIES IN ECONOMIC GROWTH: A CASE STUDY OF CHINA’S ECONOMIC GROWTH (Published)

It is historical fact the economic policies play key role in the growth and downfall of different empires whether it was Muslim empires in Spain and India or British Empire, which ruled almost the whole world in 17th and 18th centuries. The emergence of China’s economic growth is the phenomena of 21st century. The author has intended to investigate the Chinese policies in different sectors as the drivers of economic growth during the period 1980-2010.The main objective of this research is to investigate different policies introduced by the Chinese government during 1980-2010 to promote economic growth and to measure their effect at micro and macro level of Chinese economy.The author used secondary date collected from different sources such as IMF,World Bank, Barro and Lee, OECD database, US Bureau of Labour Statistics, US Bureau of Economic Analysis, and relevant Journals. Our findings and results are robust because the evidence proves that different policies implemented by Chinese government have brought substantial positive impact on national economy at micro and macro level.

Keywords: FDI, GDP, Gini Co-Efficient, Income Inequality, Poverty Alleviation

Direct Versus Indirect Taxation and Income Inequality (Published)

In this paper, we employed multivariate econometric analysis approach to study the relationship between taxation and income inequality in Nigeria. The study was a country-specific approach using tax and macroeconomic data from 1980 to 2011. We collected data from the Central Bank of Nigeria Publications, Federal Inland Revenue Service, World Bank and Index Mundi. We estimated the data using a combination of co-integration and error correction model. Preliminary diagnostic analysis using Ramsey RESET test, Breuch-Pagan-Godfrey, Granger causality test and Breuch-Godfrey test of serial correlation were affected to check the accuracy of our model. The preliminary analysis where favourable with no cases of serial correlation, non-normality, bi-directional causality and model misspecification. We found a negative and robust relationship between total tax revenue, total tax revenue to GDP ratio and income inequality in Nigeria with t-values of (-2.748706) and (-2.287270) and negative coefficients of (-0.007869) and (-0.512235) respectively. We found a negative but insignificant relationship between GDPPC, PCREDIT/GDP, TDT/TIT*TTR while LFP and TDT/TIT had positive but insignificant relationship with income inequality with coefficients of (0.421) and (1.243794) and t-values of (1.732565) and (1.717362) respectively.

Keywords: Direct Taxation, Error Correction Model, Granger Causality, Income Inequality, Indirect Taxation, Total Tax Revenue