Economic and Social Impacts of the Oil Industry on the Brazilian Onshore

João Maria Filgueira, Amaro Olimpio Pereira Júnior, Renato Araújo () and Neilton Fidelis da Silva
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João Maria Filgueira: Energy Planning Program, Alberto Luiz Coimbra Institute for Graduate Studies and Engineering Research, Federal University of Rio de Janeiro (PPE/COPPE-UFRJ), Rio de Janeiro 21941-914, Brazil
Amaro Olimpio Pereira Júnior: Energy Planning Program, Alberto Luiz Coimbra Institute for Graduate Studies and Engineering Research, Federal University of Rio de Janeiro (PPE/COPPE-UFRJ), Rio de Janeiro 21941-914, Brazil
Neilton Fidelis da Silva: Federal Institute of Education, Science and Technology of Rio Grande do Norte (IFRN), Natal 59015-000, Brazil

Energies, 2020, vol. 13, issue 8, 1-18

Abstract: Oil wealth can foster social inequality if not properly managed. This is due to the migration of production factors from different economic activities to the oil sector. As a result, unemployment, poverty, political instability, a reduction in development, among other undesirable effects on society, may arise. With that in mind, this research evaluates the government’s role in the socioeconomic development of the oil producing municipalities in Rio Grande do Norte State (RN), the largest onshore producer in Brazil. The research uses panel regression as it allows broad analyses of the space and time dimensions to be performed. In addition, it relies on statistical testing at all stages to make the research analysis more appropriate and consistent. The proposed model revealed better socioeconomic development indicators in municipalities where the local Government made public savings as reserve funds. Furthermore, the results show that appropriate public savings management allows municipal governments to design public policies to provide future generations with socioeconomic benefits, in line with the purpose of royalties.

Keywords: oil industry; oil royalties; municipal socioeconomic development; panel regression; intergenerational equity (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
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