Analysis of the Determinants of Spatial Inequality in Ghana Using Two-Stage Least-Square Regression

Abstract

Achieving spatially equitable development is a key policy objective of many African governments. This is because the persistence of glaring inequality between different parts of a country is detrimental to its overall development and has the potential to trigger conflicts. In Ghana, attempts by successive governments over the years to address the problem have not been very successful because the phenomenon has not been adequately understood. While prior studies have done a good job in examining and describing the nature and manifestations of inequality, not much has been done in terms of formal analysis of factors that might have given rise to it. This paper sought to fill this gap by identifying and analysing some of the plausible determinants of spatial inequality in Ghana. Employing the two-stage least-square (2SLS) regression method, and using district-level data, we develop a model to test the effects of several factors on socio-economic development, including levels of urbanisation, ecological factors, proximity to the national capital, proximity to the inter-regional highway system and the so-called North-South dichotomy. The results show that differences in the level of urbanization, proximity to the national capital (Accra) and ecological conditions are some of the factors contributing to spatial inequality.

Keywords: Socio-economic development; spatial inequality; north-south divide; urbanization; ecological zones; 2SLS regression