Publication: Regional Convergence in Brazil
Loading...
Published
2024-09-11
ISSN
Date
2024-09-11
Author(s)
Editor(s)
Abstract
This paper examines whether labor productivity converged across Brazil’s states (“departments”) between 2002 and 2018. The results show strong evidence of unconditional convergence in which states with lower levels of initial labor productivity experienced substantially faster labor productivity growth. The convergence rate was faster over 2002–10 compared to 2010–18 period and particularly strong in agriculture, extractives, and manufacturing. These findings of the regional convergence are robust to controlling for state and industry fixed effects, states’ initial poverty rates, human capital, tax collection per capita, and infrastructure. Given the high disparity in labor productivity across Brazil’s states, such regional convergence has the potential to raise aggregate productivity and per capita income.
Link to Data Set
Citation
“Abreha, Kaleb; Ornelas, Rafael; Zaourak, Gabriel. 2024. Regional Convergence in Brazil. Policy Research Working Paper; 10904. © World Bank. http://hdl.handle.net/10986/42147 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication The Evolution of Local Participatory Democracy in Nepal(Washington, DC: World Bank, 2025-11-05)Nepal is, according to its constitution, among the world’s most decentralized countries, with a long and complex tradition of local-level public participation. This paper traces the evolution of Nepal’s modern participatory institutions, examining the extent to which they are “induced” by external interventions versus being “organically” rooted in indigenous practices. The paper identifies three broad phases: an initial focus on participation in project implementation; a subsequent phase that expanded citizen engagement; and a third phase of citizen empowerment, culminating in the 2015 federal constitution, which granted unprecedented local autonomy. The analysis yields five key findings. First, over the past 50 years, successive reforms have progressively expanded opportunities for citizens to influence local decision-making. Second, these reforms have integrated traditional participatory mechanisms into formal institutions of local government. Third, although central-level initiatives exist, most participatory platforms continue to operate at the local level. Fourth, the federal constitution has created a new landscape of local democracy, embedding autonomy and accountability. Fifth, although they are still valued in many ethnic and territorial communities, traditional participatory practices are gradually disappearing. The paper concludes by offering policy recommendations to help donor agencies and governments strengthen Nepal’s democratic trajectory. It argues that effective interventions should build on Nepal’s deep participatory traditions while recognizing the constitutional reality of far-reaching local autonomy.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication Closing the Gender Gap in Entrepreneurship: Overcoming Challenges in Law and Practice for Female Entrepreneurs(Washington, DC: World Bank, 2026-01-07)Despite significant strides toward gender equality, women around the world continue to encounter systemic obstacles that hinder their entrepreneurial success. This paper systematically reviews the literature on the barriers female entrepreneurs face and the solutions proposed to overcome these challenges. It discusses institutional factors, financial factors, human capital factors, and social and cultural factors. The literature overview is complemented by a series of stylized facts that illustrate how overcoming some of these existing barriers is correlated with improved women’s entrepreneurship and female labor force participation, drawing on the World Bank’s Women, Business and the Law database as well as the World Bank’s Enterprise Surveys. The findings underscore the need for creating an enabling environment where women can thrive as entrepreneurs.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication A Literature Review on Productivity and Growth in Brazil(Washington, DC: World Bank, 2024-09-09)Productivity growth in Brazil has not kept pace with developed and emerging economies, despite progress in achieving macroeconomic stability and implementing reforms in product and input markets. This paper reviews the literature on reforms and growth in Brazil to understand the factors that have hindered productivity growth. The paper discusses the impact of competitive distortions on productivity, the effect of structural change on productivity growth, and the evidence on misallocation and growth dynamics. Additionally, the paper analyzes the direct and indirect effects of several reforms, such as trade liberalization and formalization policies. Based on the main lessons from this review, the paper proposes a potential reform agenda to improve improve productivity in Brazil in the coming years and narrow the income gap with developed countries.Publication When and Where Do We See Regional Poverty Reduction and Convergence?(World Bank, Washington, DC, 2016-01)In the past decade, Turkey has experienced a notable level of poverty reduction at all levels (extreme poor, poor, and vulnerable). The steady decline in poverty was also resilient to the decline in gross domestic product per capita growth during the crisis. However, although poverty convergence was strong before the financial crisis, there was an absence of regional convergence afterward. This paper analyzes poverty trends, poverty convergence, economic mobility, and the determinants of poverty reduction at the regional level over the period 2006–13. The analysis finds that agricultural growth in the east was an important contributor to Turkey's regional poverty reduction. In additionally, employment growth in the services sectors boosted poverty reduction throughout the entire country. From a fiscal perspective, the amount of per capita central spending is also linked to poverty reduction, although more strongly for regions in the west.Publication Regional Productivity Convergence in Peru(World Bank, Washington, DC, 2015-11)This paper examines whether labor productivity converged across Peru’s regions (“departments”) during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing).Publication Is the Developing World Catching up? Global Convergence and National Rising Dispersion(Washington, DC: World Bank, 2008-09)The present study uses the GIDD, a CGE-microsimulation model for Global Income Distribution Dynamics, to understand the ex-ante dynamics of global income distribution. Three main robust results emerge. First, under a set of realistic assumptions, there will be a reduction in global income inequality by 2030. This potential reduction can be fully accounted for by the projected convergence in average incomes across countries, with poor and populous countries growing faster than the rest of the world. Second, this convergence process will be accompanied by a widening of income distribution in two-thirds of the developing countries; the main cause being increasing skill premia. Third, a trend that may counter-balance the potential anti-globalization sentiment is the emergence of a global middle class: a group of consumers who demand access to, and have the means to purchase, international goods and services. The results show that the share of these consumers in the global population is likely to more than double in the next 20 years. These ex-ante trends in global income distribution suggest that the mid-1990s could be seen as a turning point after which global inequality began showing a negative tendency.Publication Cameroon Social Safety Nets(World Bank, Washington, DC, 2012-06)This report lays the groundwork for a safety net system that can address the needs of the poor in Cameroon. Cameroon does not have a coordinated system of safety nets; rather, small, isolated interventions which together do not address the needs. Moreover, food and fuel price subsidies which mainly benefit the rich cost around 2 percent of GDP/year much more than total safety net spending. There is a need for a social protection strategy and an effective safety net system to address chronic poverty and food insecurity in Cameroon. This strategy should identify risks and vulnerabilities so they can be addressed by appropriate programs. Investments in human capital and in geographic areas most affected by poverty the North and Far North should be priority.
Users also downloaded
Showing related downloaded files
Publication Kyrgyz Republic Country Climate and Development Report(Washington, DC: World Bank, 2025-11-03)This Country Climate and Development Report (CCDR) on the Kyrgyz Republic aims to support the country’s development goals amid a changing climate. The CCDR considers two policy scenarios up to 2050: the business-as-usual (BAU) and high-growth scenarios. As it quantifies the likely impacts of climate change on the Kyrgyz economy between now and 2050, the report highlights key government actions to best prepare for and adapt to climate impacts (referred to as “with adaptation” measures), with a particular focus on the time horizon up to 2030. The CCDR also outlines a path to net zero emissions by 2050 (referred to as “with mitigation” measures, “decarbonization,” or, simply, “net zero 2050”), highlighting associated development co-benefits.Publication Jobs in a Changing Climate: Insights from World Bank Group Country Climate and Development Reports Covering 93 Economies(Washington, DC: World Bank, 2025-11-05)The World Bank Group’s Country Climate and Development Reports (CCDRs) provide a crosscutting look at how countries’ development prospects, and the job opportunities they offer to their people, can be threatened by climate impacts and supported by climate policies. Climate change and policies affect jobs through impacts on productivity, energy and material efficiency, and physical, human, and natural capital. They can also transform employment opportunities, especially through complementary measures that help workers and firms adapt to and benefit from new technologies and production practices. Prepared by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), CCDRs integrate country perspectives, climate science and economic modeling, private sector information, and policy analysis to assess how countries can successfully grow and develop their economies and create jobs despite increasing climate risks and while achieving their climate objectives and commitments. Each CCDR starts from the country’s development priorities, opportunities, and challenges, and is developed in close consultation with governments, businesses, and civil society, ensuring the recommendations reflect national priorities. By combining evidence on adaptation, resilience, and emissions pathways, CCDRs highlight where climate action can reinforce development and job creation, and where targeted policies are needed to manage risks and smooth labor market transitions. Taken together, these elements can help create local jobs, ensure economic transitions are just and inclusive, and equip workers and firms to navigate the disruptions and opportunities of a changing climate and changing technologies.Publication Central African Republic Country Climate and Development Report(Washington, DC: World Bank, 2024-10-23)The Central African Republic (CAR) Climate Change and Development Report (CCDR) provides an in-depth analysis of the country’s vulnerability to climate change and its implications for sustainable development. The report identifies key challenges, including frequent extreme weather events such as floods and droughts, deforestation, and weak institutional capacity. These challenges threaten the livelihoods of rural populations, exacerbate food insecurity, and hinder economic development. However, the CCDR also highlights significant opportunities for CAR to transition toward a more resilient and sustainable future. By promoting climate-smart agriculture, sustainable forest management, and renewable energy development, the country can mitigate the effects of climate change while unlocking new economic growth avenues. The report provides strategic recommendations to strengthen institutional capacities, integrate climate action into national development plans, and mobilize climate finance to support resilience-building initiatives. The CCDR serves as a roadmap for operationalizing climate action in CAR, calling for stronger governance, enhanced stakeholder engagement, and innovative financing mechanisms to help the country adapt to climate challenges while promoting sustainable development.Publication Guinea-Bissau Country Climate and Development Report(Washington, DC: World Bank, 2024-10-23)Guinea-Bissau is endowed with a wealth of natural resources, with the highest natural capital per capita in West Africa (US3,874 dollars per capita), which could be leveraged for sustainable and resilient growth. However, Guinea-Bissau faces significant development hurdles, such as high poverty rates, political instability, and economic challenges, including an over-reliance on cashew nuts. Rural poverty has increased, and the nation's infrastructure, education, and health care systems are underdeveloped. Climate change poses a severe threat, potentially impacting agriculture, fisheries, and infrastructure. Without adaptation, it could lead to a significant cut in real GDP per capita (minus 7.3 percent by 2050) and increase in poverty (with up to over 200,000 additional poor by 2050, that is, 5 percent of the expected population, in the worst scenario). The country's low greenhouse gas emissions are expected to rise, mainly due to agriculture and land-use changes, with deforestation being a major contributing factor. Although Guinea-Bissau is a low emitter, it has high mitigation ambitions, targeting a 30 percent reduction in greenhouse gas emissions by 2030. The Nationally Determined Contribution outlines significant climate actions, with initiatives focused on forest conservation, sustainable agriculture, and community development. However, the country's political instability, institutional weaknesses, and limited financial resources pose challenges to implementing these climate commitments, which depend heavily on external funding. The financial sector's underdevelopment and vulnerability to external shocks limit its ability to support green investments, though reforms could enhance resilience. Guinea-Bissau must consider its climate financing as development financing and vice-versa, engage the private sector, and integrate climate goals with national development plans to ensure a sustainable future. Concessional climate financing is vital due to the underdeveloped financial sector and the government’s limited borrowing capacity. Addressing Guinea-Bissau's vulnerability to climate change and its structural issues requires a cohesive approach that integrates development and climate strategies. This could involve improving governance, diversifying the economy, protecting natural capital, developing human capital, and investing in sustainable agriculture and infrastructure. The transition to a more sustainable and inclusive development pathway that supports economic growth is possible, but requires focusing on key strategic sectors, enhancing institutional capacity, and creating the conditions to mobilize finance. As a highly vulnerable country, there are myriad needs in the different sectors; however, to be more efficient and effective, Guinea-Bissau should prioritize actions in a few sectors, especially actions on biodiversity, agriculture, and social protection. Low carbon development, especially in energy and forestry sectors, could provide cost-efficient solutions and attract climate finance, including from the private sector, which will support the overall development agenda.Publication Leveling the Playing Field(Washington, DC: World Bank, 2024-12-02)Structural sources of Africa’s inequality are rooted in laws, institutions, and practices that create advantages for a few but disadvantages for many. They include differences in living standards that come from inherited or unalterable characteristics, such as where people are born and their parents’ education, ethnicity, religion, and gender. They also arise from market and institutional distortions that privilege some firms, farms, and workers to access markets, employment, and opportunities while limiting access for the majority and limiting earning opportunities. "Leveling the Playing Field: Addressing Structural Inequalities to Accelerate Poverty Reduction in Africa" argues that policies to address high levels of structural inequality in Africa are also at the heart of what is needed to accelerate progress in reducing extreme poverty. There is nothing inevitable about structural inequality. Economies that put up barriers to opportunities can also remove and replace them with policies that create a level playing field. Indeed, across the world, countries where opportunities are distributed more fairly grow faster and have lower poverty incidence. Broadening access to opportunities represents one of Africa’s key prospects for raising productivity and earnings and accelerating poverty reduction. Leveraging the most recent data available for the region, "Leveling the Playing Field" provides recommendations aimed at improving the productive capacity of the poor, the ability of poor individuals to use their capacities for well-paying job opportunities, and the design of fair fiscal policies.