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Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis

Author

Listed:
  • Henri Njangang

    (LAREFA, University of Dschang, Cameroon)

  • Alim Beleck

    (HTTTC, University of Bamenda)

  • Sosson Tadadjeu

    (LAREFA, University of Dschang, Cameroon.)

  • Brice Kamguia

    (LAREFA, University of Dschang, Cameroon.)

Abstract
Surprisingly, little is known about the cross-country effect of information and communication technology (ICT) on wealth inequality. At the same time, there is some tentative evidence suggesting that information and communication technology is positively correlated with income inequality. However, whether and how ICT affects wealth inequality is less explored, particularly because of the lack of reliable data on wealth inequality. This paper, therefore, fills this gap and contributes to this new literature by investigating the effect of ICT on wealth inequality in a sample of 45 developed and developing countries over the period 2000-2017. ICT is measured with six different indicators (including internet penetration, mobile penetration, ICT service exports, the ICT index, ICT quality, and ICT quantity), while wealth inequality is measured with three different indicators (comprising billionaire wealth to GDP, the Top 1% wealth share, and the Top 10% wealth share). The empirical analysis is based on the Generalised Method of Moments, and the results show that ICT increases wealth inequality. Furthermore, we show that democracy mitigates the increasing effect of ICT on wealth inequality. This result suggests that improving democracy in both developed and developing countries is an effective mechanism for mitigating the effects of ICT on wealth inequality. Therefore, we encourage efforts to implement democratic institutions that ensure respect for citizens' freedoms, greater democratic accountability, and executive constraints that allow for a more egalitarian distribution of wealth.

Suggested Citation

  • Henri Njangang & Alim Beleck & Sosson Tadadjeu & Brice Kamguia, 2021. "Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis," Working Papers 21/057, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:21/057
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    File URL: http://publications.excas.org/RePEc/exs/exs-wpaper/Do-ICTs-drive-wealth-inequality-Evidence-from-a-dynamic-panel-analysis.pdf
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    4. Simplice A. Asongu & Cheikh T. Ndour & Judith C. M. Ngoungou, 2023. "The effects of gender political inclusion and democracy on environmental performance: evidence from the method of moments by quantile regression," Working Papers of the African Governance and Development Institute. 23/060, African Governance and Development Institute..
    5. Nchofoung, Tii & Asongu, Simplice & Tchamyou, Vanessa & Edoh, Ofeh, 2021. "Political inclusion and democracy in Africa: some empirical evidence," MPRA Paper 111838, University Library of Munich, Germany.
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    8. Toyo Amègnonna Marcel Dossou, 2023. "Income Inequality in Africa: Exploring the Interaction Between Urbanization and Governance Quality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 167(1), pages 421-450, June.

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    More about this item

    Keywords

    ICT; Wealth inequality; Panel data;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    NEP fields

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