From Herds to Harbors: The Asymmetric Impact 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, and quantile regression, the study captures both linear and nonlinear effects across different levels of the income distribution. The results indicate that livestock production and GDP per capita are associated with reductions in inequality, while crop and fish production tend to exacerbate it, largely due to disparities in land access, market connectivity, and infrastructure. Conflict significantly worsens inequality, especially among lower-income populations, while remittances have short-run equalizing effects but limited long-term influence. These findings underscore the need for inclusive, sector-specific policies that expand access to productive resources, strengthen remittance infrastructure, and mitigate conflict. The study contributes to the literature on inequality in post-conflict economies and highlights the importance of integrated, resilience-focused development strategies.