Corruption and income inequality in selected East African community countries

Abstract

High-income inequality persists in the East African Community (EAC) alongside significant levels of public sector corruption. Yet, a comprehensive understanding of how corruption drives inequality in this region remains limited. This study addresses this gap by examining the long run and short-run effects of public sector corruption on income inequality in Kenya, Tanzania, and Uganda. Drawing from the institutional theoretical framework, we employ a panel-ARDL model using data from 2000 to 2021. Our findings reveal a substantial positive association between public sector corruption and income inequality in the long run. This suggests that corruption exacerbates income disparities in these countries. Additionally, unemployment exhibits a positive association with inequality, while higher primary school enrolment shows a mitigating effect. Based on the study findings, policymakers in the EAC should prioritize combating public sector corruption to address rising inequality. The study underscores the urgency for comprehensive anti-corruption measures to promote a more equitable distribution of resources in the region