The effects of oil royalties on regional inequality in Brazil

Luiz Carlos de Santana Ribeiro, José Ricardo de Santana and Rafaela Nascimento Santos

Revista CEPAL, 2022

Abstract: This article evaluates the impact of oil royalties on Brazil’s production structure and their effects on regional inequality. An interregional input-output model was used, encompassing the 27 Brazilian states and 26 sectors, with base year 2008. The simulation strategy assumed 75% of these funds are channelled into education and 25% into the health sector, as mandated by Law 12.858/2013. To measure the effect of royalties on regional inequality, the Gini coefficient was calculated both ex-ante and ex-post with respect to the impact analysis. The main findings indicate that interregional and intersectoral spillovers are weak; but, in the Southeast and Northeast regions, the investment of royalties in education and health could help reduce intraregional inequality.

Date: 2022-04
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Persistent link: https://EconPapers.repec.org/RePEc:ecr:col070:48047

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