Sustainability in the tropics: does a boom in deforestation lead to a bust in development?

Diana Weinhold, Eust�quio J. Reis and Petterson Vale ()

No 82, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: We revisit the hypothesis tested in Rodrigues et al. (2009) that the process of human development in Amazonia follows a boom-and-bust (inverted U) pattern. We showthat the 'boombust' pattern that Rodrigues et al. report is a spurious artefact of spatial correlation, driven primarily by the large, multifaceted (and unobserved) differences between municipalities in and around Amazonas and Maranh�o states. We confirm these (non-) results in the time series data; there is no �smoking gun� dynamic boom and bust associated with land clearing in any municipality data from 1980 to 2000. Furthermore, the past economic performance of municipalities categorised as�postfrontier� by Rodrigues et al. themselves are shown to have been economic underperformers since the 1970s, and if anything they have improved their relative economic standing in the years since 2000. In sum, we find no evidence in either the cross section or the time series data of any �boombust� patterns of development in the Brazilian Amazon.

Date: 2012-05
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