The Regional Impact of National Policies

The Regional Impact of National Policies

The Case of Brazil

Edited by Werner Baer

Brazil is a country of continental proportions whose gross domestic product is unevenly distributed among its various regions. The impact of general domestic economic policies has often been perceived as not being regionally neutral, but as reinforcing the geographic concentration of economic activities. This detailed book examines the regional impact of such general policies as: industrialization, agricultural modernization, privatization, stabilization, science and technology, labor, and foreign direct investment.

Chapter 1: Introduction

Werner Baer

Subjects: development studies, development economics, economics and finance, development economics, regional economics, urban and regional studies, regional economics

Extract

Werner Baer It is well known that the benefits of Brazil’s economic growth and development have been unevenly (some would say inequitably) distributed from a regional point of view. This is evident from the data in Table 1.1, where it will be noted that the Southeast of the country, with 42 percent of the population, produced 56 percent of the gross domestic product (GDP); whereas the Northeast, with 27.7 percent of the population, produced only 13 percent of the GDP. There are many studies which have dealt with the phenomenon.1 On occasion the central government has taken action to try explicitly to redress regional inequality: examples are the regional development Table 1.1 Brazil: regional distribution of population and GDP a. Brazil: regional population distribution 1970 North Northeast Southeast South Center-West Total 3.9 30.3 42.7 17.7 5.4 100.0 1996 7.1 28.5 52.7 15.0 6.7 100.0 2003 7.9 27.8 42.6 14.7 7.0 100.0 2006 8.0 27.6 42.6 14.6 7.2 100.0 2010 8.5 27.7 42.1 15.0 6.7 100.0 b. Brazil: regional distribution of GDP 1970 North Northeast Southeast South Center-West Total Source: IBGE. 1997 4.4 13.1 58.6 17.7 6.2 100.0 2003 5.0 13.8 55.2 18.6 7.4 100.0 2005 5.0 13.1 56.5 16.3 8.7 100.0 2008 5.1 13.1 56.0 16.6 9.2 100.0 2.2 12.1 65.0 17.4 3.8 100.0 1 BAER PRINT (M2899).indd 1 02/05/2012 16:31 2 The regional impact of national policies institutions (such as SUDENE for the Northeast of Brazil), regional development banks, and special tax incentives for firms investing in...