Read more about the article The Amazon Needs the Rule of Law, Not the Rule of Chainsaw
Floresta amazônica, meio ambiente, preservacão ambiental, madeira, desmatamento, em Manaus | Sérgio Lima/Poder360 01.nov.2021

The Amazon Needs the Rule of Law, Not the Rule of Chainsaw

At the origin of deforestation, there is a problem of what economists call ‘microeconomic incentives’, that is, the (risk-weighted) costs and benefits for the perpetrators. Avoiding forest damage means acting on this calculation. Having bills approved is not enough. For deforesters to take them into account in their calculations, enforcement must be effective. The risk-adjusted cost-benefit calculation favors compliance with the law only when, in case of disobedience, the probability of capture and significant punishment are sufficiently high.

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Read more about the article Does the Brazilian policy for oil revenues distribution foster investment in human capital?

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

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.

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Read more about the article Natural wealth and economic growth – the case of sub-Saharan Africa

Natural wealth and economic growth – the case of sub-Saharan Africa

This note approaches the relationship between natural wealth and economic growth, using the case of Sub-Sahara African economies as an illustration. Delving into recent World Bank reports, it highlights how a sustained positive correlation between natural capital and GDP growth happens through the transformation of the former into other forms of assets: produced capital, human capital and other intangible assets. Governance features and the quality of macroeconomic policies are of the essence for such a benign trajectory to take place.

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Read more about the article A straightjacket to Help Brazil Fight Fiscal Obesity

A straightjacket to Help Brazil Fight Fiscal Obesity

Brazil’s GDP contraction since mid-2014 has multiple non-fiscal roots but it has morphed into an unsustainable fiscal trajectory. Dealing with the latter has become a precondition for full economic recovery and the Brazilian government has submitted to Congress a constitutional amendment bill mandating a public spending cap for the next 20 years. This piece considers how the Brazilian landscape evolved toward such a precipice and why additional reforms – particularly on pensions – will have to be implemented to make the spending cap feasible.

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