Business Constraints, Information Technology and Income Inequality in Sub-Saharan Africa

Abstract

The objective of this study is to examine how information and communication technology can be used to moderate the unfavourable effects of doing business constraints on income inequality in 48 sub- Saharan African countries for the period from 2004 to 2019. The Gini coefficient is used as the income inequality indicator, whereas the ICT dynamics employed entail subscriptions to mobile phones and the Internet. Ten indicators of doing business constraints are also employed. From the findings, for the most part, doing business constraints increase income inequality while ICT moderates the positive effect of doing business constraints on income inequality. Thresholds of ICT at which the doing business constraints no longer increase income inequality are provided. At these established ICT penetration thresholds, ICT effectively moderates doing business constraints to reduce income inequality.