The effects of oil royalties on regional inequality in Brazil

1 April 2022 | Publication

The effects of oil royalties on regional inequality in Brazil

- Author: Santos, Rafaela Nascimento; Ribeiro, Luiz Carlos de Santana; Santana, José Ricardo de
- Physical description: páginas. 191-20
- UN symbol (Signature): LC/PUB.2022/5-P
- Date: 1 April 2022

Abstract

This article evaluates the impact of oil royalties on Brazil’s production structure and their effects on regional inequality. An interregional input-output model was used, encompassing the 27 Brazilian states and 26 sectors, with base year 2008. The simulation strategy assumed 75% of these funds are channelled into education and 25% into the health sector, as mandated by Law 12.858/2013. To measure the effect of royalties on regional inequality, the Gini coefficient was calculated both ex-ante and ex-post with respect to the impact analysis. The main findings indicate that interregional and intersectoral spillovers are weak; but, in the Southeast and Northeast regions, the investment of royalties in education and health could help reduce intraregional inequality.

SDG(s)