The ARUA Centre of Excellence for Inequality Research is configured as a hub-and-spoke model. The University of Cape Town hosts the hub, as well as the South African node, with two strong research centres based at nodes at the University of Ghana, Legon and the University of Nairobi. The research groups and members of the three research nodes bring together internationally eminent African scholars who are influential researchers in their country contexts and have excellent research connections to their respective national statistical offices.
The main focus and scope of the Ghanaian node of ACEIR is to undertake key studies on inequality in Ghana. The research entails conducting rigorous analyses of the nature, patterns and dynamics of inequality and poverty in Ghana using existing census and panel survey data.
In view of these broad objectives, the node is currently undertaking three key studies which consist of a diagnostic study of inequality as well as two empirical research studies on inequality in Ghana. The diagnostic study will produce a report on inequality in Ghana by describing its dynamics and employing poverty maps to incorporate analyses of spatial inequalities in the Ghanaian context.
Using the two waves of the Ghana Socio-Economic Panel Survey, the two research papers seek to provide empirical evidence on various dimensions of inequality in Ghana. The first paper examines the micro-level determinants of economic inequality in Ghana while focusing on the differentiated effects of household attributes in inequality in rural and urban areas of the country. The second study seeks to investigate the relationship between economic inequalities and inequalities of opportunities in the context of Ghana. The study focuses particularly on the inequalities in educational opportunities and explores how this affects economic inequality.
Ultimately, the ACEIR research in Ghana will enhance the process of policymaking for poverty and inequality reduction by providing an enhanced understanding of inequality in the country. The diagnostic report in particular will provide the documentation of the nature and patterns of inequality in Ghana that will allow stakeholders to appreciate Ghana’s inequality profile more comprehensively. Similarly, the two research studies will result in empirical evidence on the various dimensions of inequality. Findings from these studies will provide the required guidance for sound and effective policymaking towards tackling inequality in Ghana.
Beyond other academic researchers who work in the area of poverty and inequality, particularly in developing countries, the outputs of this research target non-academic stakeholders in Ghana. Direct beneficiaries include policymakers at all levels of government, such as the Ministry of Finance and its related agencies. The Ghana Statistical Service also stands to benefit as ACEIR’s work highlights the data needs for robust empirical analyses of inequality and related dynamics in Ghana. To ensure effective targeting of programmes aimed at reducing poverty and inequality in Ghana, development partners may also rely on the research findings for decision-making.
The current research agenda of the Ghanaian node is closely aligned with Sustainable Development Goal 4 and 10.
Goal 4 aims to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all. In many societies, inequalities in education opportunities have long-term implications for individuals’ own prosperity as well as for a country’s growth and long-term stability. The factors that contribute to inequalities in education opportunities in Ghana are explored by this ACEIR node’s research. Additionally, the research assesses the contribution of inequality of education opportunities to overall income inequality in the country.
SDG 10 aims to reduce inequality within and among countries. To achieve this objective, it is important first to understand how inequality varies among sub-groups (e.g., educated vs. uneducated; ethnicity, gender, etc.) in the country. This understanding will be important for targeting adequate interventions towards reducing economic inequality. Current research at the Ghanaian node explores inequality dynamics among various sub-groups in Ghana.
ACEIR’s development of a diagnostic tool for inequality will be useful for policymakers and other stakeholders by providing the relevant and current data to facilitate the debate on inequality (and poverty) in the country. This tool also critically assesses the various social and economic policies and interventions that have been implemented over the years to address the inequality situation in Ghana. The ability to monitor the effects of a policy intervention and evaluate the outcomes on inequality is critical for future planning. Ongoing research at the node also investigates household or micro-economic determinants of inequality, and how these differ across rural/urban residence (as the returns to household characteristics may differ by locality).
There are several ways that the country and African continent benefit from the Ghanaian node of ACEIR. First, the generation of relevant statistics and research outputs on inequality in Ghana is useful for adequate policy response at the country level. More broadly, access to relevant data on inequality facilitates the monitoring of progress on the SDGs and ensures that specifics are taken into consideration in the evaluation of the causes and consequences of inequality on the continent.
Second, the training and mentorship components of ACEIR offer a number of benefits for both the Ghanaian mentors and mentees. Collaborators are cultivated, and competencies are enhanced for current and future projects; mentees have the opportunity to build a stronger professional skillset, develop their network, and grow their knowledge and experience under proficient supervision.
Finally, access to funds for conference attendance and results dissemination is beneficial for a number of reasons including being up to date on current research on inequality; and engagement in high-level debates useful for the refinement of research ideas.
The ACEIR team at the School of Economics, University of Nairobi is working in collaboration with the Kenya National Bureau of Statistics. The project, which is funded by the Agence Française de Développement (French Development Agency/AFD), has two components: inequality diagnostics for Kenya; and fiscal incidence analysis for the country.
The project is data intensive and will provide trends in inequality and poverty over time by using the recent Kenya Integrated Household Budget Survey for analysis.
The fiscal incidence analysis will use the Commitment to Equity (CEQ) Institute approach in its analysis, using Kenyan data on taxation, expenditure and transfers.
The study targets key stakeholders in the public sector including policymakers in several ministries such as the Ministry of Finance and the Treasury and various think tanks and non-governmental organisations (NGOs).
The research has the potential to improve and update information on the magnitude and structure of inequality in Kenya based on several datasets. The research also will improve understanding the effects of government tax revenue and spending on the distribution of income. Third, the results can be used to simulate various policy reforms to establish their effects on inequality.
Several groupings stand to gain from this research. These include national government officials in various departments, county government officials, scholars and NGOs. The findings of the study will form the basis of engagements with these groups.
ACEIR’s research focus is an issue that is debated in the media, at political meetings and by research think tanks. With evidence on inequality in Kenya, it is possible to ensure that economic growth reduces poverty. This is because in the presence of deep inequality growth may not yield benefits in terms of lower incidence of poverty.
The South African node of ACEIR is based at the Southern Africa Labour and Development Research Unit (SALDRU) at the University of Cape Town. The work is aimed at measuring economic inequality in South Africa and disentangling the drivers of inequality in this country. The idea is that a better understanding of inequality dynamics in South Africa, which is based on evidence and rigorous analysis, can improve the policies designed to address extreme inequality in South Africa.
The analysis of large datasets mostly involve survey data, such as South Africa’s National Income Dynamics Study or data collected by the national statistical office, Statistics South Africa. Administrative data on education or taxes are also used. At present, the node’s work is shifting from the dominant focus on inequality measurement to also include work on the drivers of inequality and policy levers to address inequality.
The research contributes to a broader project in understanding inequality in South Africa. Some of it will be published in journals or as working papers and then translated into policy briefs. It is important to understand that one piece of research seldom makes a huge impact, either to researchers’ understanding or to the world at large. What is more effective is to slowly build a substantial body of evidence, with each individual’s research generally contributing a small amount to this process. But with a number of researchers, and across a long period of time, there is tremendous potential to have an impact on how people think about inequality and how to reduce the exceptionally high rates of inequality.
Beneficiaries can be thought of as circles of influence. The primary beneficiaries are the academic community that studies inequality, as this is the group best placed to read and understand the work.
Then, closely related are the students who get involved in the process, as they get training in the methods of research and exposure to the subject matter.
Over time, as a body of literature emerges, it has the potential to shape both public opinion as well as policymakers’ ways of thinking.
Inequality is a direct measure of welfare. High levels of inequality are shown to correlate with higher levels of stress, poor health, social and political instability, and economic distortions. Hence, addressing the levels of inequality in South Africa will affect many of the SDGs.
At the most fundamental level, a key role of the academy is to find truth. Without research, we wouldn’t know if inequality was really very high in South Africa relative to other countries, nor would we know if it was getting better or worse.
The South African node of ACEIR and its work is one part of a much larger ecosystem. Being a member of a research network such as ACEIR enables the node team to teach and learn new skills from partners and facilitates comparability of research findings across different geo-political entities. The means that the researchers are likely to progress both farther and faster in terms of addressing the challenges that inequality poses to the country.
Southern Africa Labour and Development Research Unit,
School of Economics,
Middle Campus, Stanley Road, University of Cape Town, Rondebosch, 7701