Critical added tax on fuel will have a

Critical notes on how
Inequality can be measured. What do you regard as the causes of inequality in
your country?

“Measurement” presupposes the possibility that inequality
can be captured with quantitative instruments and indicators.  Hence the
use of statistical instruments such as the Gini coefficient to
measure income inequality.

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The good thing about measurement is that, it highlights spending power
within countries which in turn lends itself to disaggregation such as
along demographic lines. It enables the mapping out of historical trends in
income distribution. And also maps out the sources of national income by sectors
hence gives a clue to distributional patterns. It can also be measured by
tracking the impact of tax on income sources. Example 5% value added tax on
fuel will have a greater impact on the incomes of persons in the lower income
bracket than on relatively higher income earners. Despite this, measurement has
its demerits and it can be seen as follows; it fails to capture the
root/sources of inequality. It fails to capture whether inequality is voluntary
or induced. Not all individuals want to be “equal” with others. It may also be
misleading. For example Income inequality does not mean inequality in other
dimensions such as social honour: respondents to data gathering exercises may
over estimate or under estimate their earnings. Again, measures of inequality
may indicate economic transformation and progress such as Urbanization. Hence
may not necessarily mean social retrogression.

In relation to the causes of inequality in Ghana, in the
past 20 years Ghana has made great strides in economic growth and in reducing
poverty. Nevertheless, Ghana is becoming an
increasingly unequal country where the benefits of economic growth and poverty
reduction are not equally distributed across the nation, across gender and
across economic quintiles. The causes of inequality in Ghana can be seen as
follows; inappropriate national economic policies due to
assumptions derived from formalized systems. The fact that Ghana has a large informal sector which accounts for the
largest proportion of the labor force implies a significant proportion of the
national demographic is not captured/understood. Most of Ghana’s economic
sectors are informal yet our economic policies are based on formal sectors,
hence causing inequality.
Also, Historical factors which have
not been reversed, such as the North-South inequality due to the legacy of
British colonial policy. Furthermore, Cultural
factors which determines access to factors of production. An example is
Patriarchy structures land tenure systems which does not favor the economic
interests of women.
Lastly, Collateral requirements for capital out of reach for budding women and
youthful entrepreneurs, is another cause of inequality in Ghana.