Legacies of inequality: the case of Brazil

Evan Wigton-Jones ()
Additional contact information
Evan Wigton-Jones: Husson University

Journal of Economic Growth, 2020, vol. 25, issue 4, No 3, 455-501

Abstract: Abstract This research examines the effects of inequality on long-run development within Brazil. I first exploit variation in temperature and precipitation to instrument for the local distribution of land in 1920 using a two stage least squares instrumental variables framework. My instrument is an index quantifying the suitability of local climatic conditions for plantation versus smallholder agriculture. I construct this index using information on the growing conditions of crops within certain plant taxonomies that are more biologically suited for smallholder or plantation production. I argue that this index more fully identifies the optimal environmental conditions for these two types of agricultural production, and I show that it serves as a robust predictor of local land inequality in the year 1920. IV estimates then reveal that greater inequality is associated with less local government spending on welfare and public goods over the 1995-2005 time period, as well as reductions in measures of local government quality and per-child education spending. It is also associated with lower levels of development, as measured by the local Human Development Index (HDI) for the year 2000. Inequality primarily affects the HDI through shorter life expectancies and lower incomes. I argue that the latter is consistent with the agrarian elite obstructing the transition of the local economy from agriculture to industry/services, as historically unequal municipalities contain a greater percentage of workers in the lower-wage agriculture sector, and this sector itself constitutes a larger share of local GDP.

Keywords: Inequality; Economic development; Brazil; Agriculture (search for similar items in EconPapers)
JEL-codes: D02 N36 O12 O15 Q15 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10887-020-09184-5 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jecgro:v:25:y:2020:i:4:d:10.1007_s10887-020-09184-5

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10887/PS2

DOI: 10.1007/s10887-020-09184-5

Access Statistics for this article

Journal of Economic Growth is currently edited by Oded Galor

More articles in Journal of Economic Growth from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().