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A resource-rich neighbor is a misfortune: The spatial distribution of the resource curse in Brazil

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  • Phoebe W. Ishak
  • Pierre-Guillaume Méon

Abstract

We study the spatial distribution of the effect of oil and gas revenues on Brazilian municipalities, using variations in the international prices of oil and gas to establish causality. Oil and gas revenues increase economic activity, measured by night-time light emissions, in oil-producing municipalities but impose negative spill-overs on neighbouring municipalities. Spill-overs dominate beyond 150 km from oil activities and compensate direct effects in micro-regions. In oil municipalities, oil and gas revenues increase royalties, population, local real prices, crime, and real wages, essentially in manufacturing and services. Spillovers are negative on wages and prices and positive on royalties and crime.

Suggested Citation

  • Phoebe W. Ishak & Pierre-Guillaume Méon, 2020. "A resource-rich neighbor is a misfortune: The spatial distribution of the resource curse in Brazil," Working Papers CEB 20-001, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:2013/302035
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    Cited by:

    1. Ishak, Phoebe W., 2021. "Murder nature weather and violent crime in Brazil," Discussion Papers 2021/2, Free University Berlin, School of Business & Economics.

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    More about this item

    Keywords

    Natural resources curse; oil; spill-over effects; Night-time lights; Brazil;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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