Asymmetric effects of production, conflict, and remittances on income inequality in Somalia

Income inequality remains a pressing challenge in fragile states marked by conflict, weak institutions, and unequal access to productive resources. Somalia, characterized by dependence on traditional sectors, widespread displacement, and regional disparities, offers a compelling context for examining the structural drivers of inequality. This study investigates how livestock, crop, and fish production, along with conflict, remittances, and GDP per capita, influence income inequality in Somalia between 1989 and 2022. Using time series econometric methods, including ARDL, NARDL, FMOLS, quantile regression, and sensitivity analysis using the top 10% income share, the study captures linear, asymmetric, long-run, robustness, and distribution-specific effects. The results indicate that livestock production and GDP per capita reduce inequality, while crop production tends to increase it due to unequal access to land, inputs, and markets. Fish production shows mixed effects, depending on access to fisheries assets and infrastructure. Conflict worsens inequality, while remittances have a modest equalizing effect through household income support. These findings highlight the need for inclusive sector-specific policies that expand productive access, strengthen remittance infrastructure, support small-scale producers, and reduce conflict-related vulnerabilities.