Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123665
Authors: 
Asongu, Simplice A.
Year of Publication: 
2015
Series/Report no.: 
AGDI Working Paper WP/15/017
Abstract: 
A recent publication by the World Bank on Millennium Development Goals (MDGs) has established that extreme poverty has been decreasing in all regions of the world with the exception of sub-Saharan Africa (SSA), in spite of over two decades of growth resurgence. This chapter explores the role of transfer pricing in SSA's extreme poverty tragedy. The analytical structure entails: (i) emphasis of rational asymmetric development as the dark side of transfer pricing, (ii) evidence that the recent growth resurgence in African countries has been driven substantially by resource-rich countries which are experiencing high levels of exclusive growth and extreme poverty, (iii) the practice of transfer pricing by multinationals operating in resource-rich countries of SSA and (iv) a Zambian case study of extreme poverty and transfer pricing schemes by Glencore in the copper industry. While transfer pricing is contributing to diminishing African growth, available evidence shows that the component growth that is not captured by transfer pricing does not trickle down to the poor because the African elite is also captured by practices of rational asymmetric development. Policy implications for the fight against extreme poverty are discussed.
Subjects: 
Transfer pricing
Asymmetric development
Extreme poverty: SSA
JEL: 
F20
F50
H20
O11
O55
Document Type: 
Working Paper

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