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Inequality and Economic Development in Brazil

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Abstract

This study addresses three questions : why do inequalities matter for Brazil's development? Why does Brazil occupy a position of very high inequality in the international community? And, What should public policy do about it? Excessive income inequality is unfair, and undesirable on ethical grounds, and can bring adverse effects on economic growth, health outcomes, social cohesion, and crime. Brazil's excessive income inequality is associated to regressive public transfers, less equitable distribution of education, and higher wage differentials. It is thus suggested that Brazil's strategy to fight inequality should focus on four areas that are good for reducing inequality, good for reducing poverty, and good for increasing efficiency, competitiveness, and growth: raising the level, and reducing the inequities of educational attainment, reducing the wage skill premium of post-secondary education, reallocating public expenditure away from excessive, and regressive transfers, and taking advantage of the opportunity to implement an indirect tax reform, that can reduce the inequity of indirect taxation. Despite the absence of explicit tradeoffs between equity, and efficiency, these policies do not benefit everyone, and they do involve inevitable political choices.

Suggested Citation

  • World Bank, 2004. "Inequality and Economic Development in Brazil," World Bank Publications - Books, The World Bank Group, number 14913, December.
  • Handle: RePEc:wbk:wbpubs:14913
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    Cited by:

    1. repec:asg:wpaper:1029 is not listed on IDEAS
    2. Maribel ELIAS & Sergio J. REY, 2011. "Educational Performance And Spatial Convergence In Peru," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 33, pages 107-135.
    3. Faguet, Jean-Paul & Shami, Mahvish, 2008. "Fiscal policy and spatial inequality in Latin America and beyond," LSE Research Online Documents on Economics 27162, London School of Economics and Political Science, LSE Library.
    4. Bastos, Paulo & Straume, Odd Rune, 2016. "Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment?," World Development, Elsevier, vol. 78(C), pages 496-510.
    5. repec:idb:brikps:238 is not listed on IDEAS
    6. Vinyes, Cristina & Roe, Terry, 2012. "Growth of the Brazilian biofuel sector: an inter-temporal general equilibrium analysis," Conference papers 332230, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Fabio Clementi & Francesco Schettino, 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," Economics Bulletin, AccessEcon, vol. 33(3), pages 1796-1815.
    8. Raul M. Silveira-Neto & Carlos R. Azzoni, 2012. "Social Policy As Regional Policy: Market And Nonmarket Factors Determining Regional Inequality," Journal of Regional Science, Wiley Blackwell, vol. 52(3), pages 433-450, August.
    9. Peter J Hotez, 2008. "The Giant Anteater in the Room: Brazil's Neglected Tropical Diseases Problem," PLOS Neglected Tropical Diseases, Public Library of Science, vol. 2(1), pages 1-3, January.
    10. Justesen, Michael, 2008. "Is the window of opportunity closing for Brazilian youth? Labor market trends and business cycle effects," Social Protection Discussion Papers and Notes 47188, The World Bank.
    11. Forbes, Kinisha., 2011. "Inequality in crisis and recovery : revealing the divides: the case of Brazil," ILO Working Papers 994698493402676, International Labour Organization.
    12. Machado, Fabiana, 2011. "Does Inequality breed Altruism or Selfishness? Gauging Individuals’ Predispositions Towards Redistributive Schemes," MPRA Paper 35664, University Library of Munich, Germany.
    13. Janice E. Perlman, 2007. "Globalization and the Urban Poor," WIDER Working Paper Series RP2007-76, World Institute for Development Economic Research (UNU-WIDER).
    14. repec:ilo:ilowps:469849 is not listed on IDEAS

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