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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 international prices to establish causality. Those revenues increase nighttime light emissions in oil-producing municipalities but impose negative spillovers on neighboring municipalities, especially those located more than 150 kilometers from oil activities. The two effects cancel out at the level of microregions. In oil-producing municipalities, oil and gas revenues increase royalties, population, prices, crime, and real wages, particularly in manufacturing and service sectors. Spillovers are negative on wages and prices but positive on royalties and crime.

Suggested Citation

  • Phoebe W. Ishak & Pierre-Guillaume Méon, 2023. "A Resource-Rich Neighbor Is a Misfortune: The Spatial Distribution of the Resource Curse in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 71(4), pages 1213-1247.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/718554
    DOI: 10.1086/718554
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    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

    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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