THE DETERMINANTS OF RURAL-URBAN INEQUALITY IN OIC COUNTRIES

Abstrak

Rural-urban inequality is one of many economic development problems faced by OIC countries which most of them are developing countries. The aim of the study is to examine determinants of rural-urban inequality in OIC countries from 2009 – 2018. This study employs a quantitative method with panel data analysis. The examined explanatory variables are economic growth, financial development index, government expenditure, inflation, unemployment rate, trade openness, foreign direct investment, population growth, and human development index. Data was obtained from the official websites of the World Bank, IMF, and UNDP. Result of the study finds that economic growth, financial development index, government expenditure, unemployment rate, population growth, and human development index statistically significantly affect rural-urban inequality. The policy implications recommended in this study are that policymakers in OIC countries are advised to increase economic growth through improving financial sector performance, government spending, and improving the quality of human resources. This study contributes to the expanding literature on the still under-researched rural-urban inequality and, to the best of the author's knowledge, this study is the first study to examine the rural-urban inequality in countries across continents.