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Africa at a Fork in the Road: Taking Off or Disappointment Once Again?<br />

6.4.1 Adjusting for inequality<br />

Inequality can be accounted for by adjusting GDP per capita using the Dalton-Atkinson<br />

framework (Atkinson, 1970), which relies on the estimation of an inequality-aversion<br />

parameter. This approach was proposed by Ncube and others (2013).<br />

An inclusive growth index based on the Dalton-Atkinson inequality index allows the<br />

possibility of collecting periodically, say annually, subjective measures of a society’s<br />

aversion to inequality in opportunities such as access to social services, natural<br />

and physical resources, or representation in political processes. This allows for a<br />

consistent comparison of countries across time and space.<br />

For the illustration in Table 6.6, the inequality-aversion parameter was simulated<br />

from quintile distribution data for each African country and applied to per capita GDP.<br />

By construction, the inequality-aversion parameter computed for each country is<br />

highly correlated with the Gini coefficient but offers an opportunity to operationalize<br />

the Dalton-Atkinson method of adjusting per capita GDP for inequality. Demonstrating<br />

a strong preference for equity, the results penalize countries hugely for high<br />

inequality. In this respect they contrast with a simple transformation of the Human<br />

Development Index or of per capita GDP using just the Gini coefficient..<br />

Table 6.6: Africa GDP Per Capita and GDP Per Capita Adjusted for Inequality,<br />

2006-2010<br />

Country<br />

Per capita GDP<br />

Per capita GDP<br />

adjusted for<br />

inequality<br />

Gini<br />

Inequality<br />

aversion<br />

Egypt 5436.793 4.41E+08 31.56 2.283514<br />

Botswana 13440.54 7.050981 57.585 1.0073<br />

Mauritius 12296.86 1053567 38.9 1.5387<br />

Tunisia 7874.435 176235.8 40.60333 1.439971<br />

Algeria 7960.784 1401891 37.76 1.627829<br />

Gabon 14192.92 1111304 41.45 1.524286<br />

Comoros 1171.387 81.1443 64.3 0.8792857<br />

Zimbabwe missing missing 50.1 1.201386<br />

Guinea 1029.478 3326.967 42.84 1.339286<br />

South Africa 10007.61 376.1365 60.846 0.9248<br />

Morocco 4334.487 401635.1 39.872 1.601914<br />

Madagascar 990.3096 4936.06 44.68 1.382743<br />

113

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