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Does the Brazilian policy for oil revenues distribution foster investment in human capital?

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  • Nishijima, Marislei
  • Sarti, Flavia Mori
  • Canuto, Otaviano

Abstract

This paper assesses the effect of oil revenues on health and education indicators (measures for human capital) in the Brazilian municipalities using exogenous oil price variations. The Oil Law of 1997, apart from to hugely increase the amount of oil revenues distributed to the eligible municipalities due to the withdraw of the internal control price system, broadened its possible uses by the eligible municipalities, including investments in health and education in addition to traditional investments in infrastructure. Since Brazil has decentralized primary education and primary health care provision to the municipalities, we use the oil price as an external intervention in local economies to identify the effect of the non-renewed natural resources in promoting sustainable growth. We also explore the high inequality in oil revenues distribution among municipalities. Similar to the previous literature, our results point to a small improvement of the human capital indicators in the long run. The contribution of the largest oil revenue recipients, however, is null for these indicators.

Suggested Citation

  • Nishijima, Marislei & Sarti, Flavia Mori & Canuto, Otaviano, 2020. "Does the Brazilian policy for oil revenues distribution foster investment in human capital?," Energy Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:eneeco:v:88:y:2020:i:c:s0140988320300992
    DOI: 10.1016/j.eneco.2020.104760
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    Cited by:

    1. Chan, Jeff & Karim, Ridwan, 2023. "Oil royalties and the provision of public education in Brazil," Economics of Education Review, Elsevier, vol. 92(C).
    2. Silva, Lauana Blenda & Comini, Indira Bifano & Alves, Eliana Boaventura Bernardes Moura & da Rocha, Samuel José Silva Soares & Jacovine, Laércio Antônio Gonçalves, 2021. "Compensating the negative environmental impacts of mining with financial mechanisms in Brazil," Land Use Policy, Elsevier, vol. 104(C).

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    More about this item

    Keywords

    Oil revenue; Human capital; Health; Education; Inequality; Natural resources;
    All these keywords.

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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