Working Paper: CEPR ID: DP14912
Authors: Monica Martinez-Bravo; Claudio Ferraz; Frederico Finan
Abstract: This paper analyzes how changes in the concentration of political power affect long-run development. We study Brazil's military dictatorship whose rise to power dramatically altered the distribution of power of local political elites. We document that municipalities that were more politically concentrated prior to the dictatorship in the 1960s are relatively richer in 2000, despite being poorer initially. Our evidence suggests that this reversal of fortune was the result of the military's policies aimed at undermining the power of traditional elites. These policies increased political competition locally, which ultimately led to better governance, more public goods, and higher income levels.
Keywords: Political Power; Elites; Regime Transition; Economic Development
JEL Codes: D72; O43; N46
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher political concentration before the military dictatorship (N43) | Higher income levels by 2000 (D31) |
| Higher political concentration before the military dictatorship (N43) | Better provision of public goods (H49) |
| Military's policies that weakened traditional elites (P26) | Increased local political competition (D72) |
| Increased local political competition (D72) | Lower illiteracy rates (I24) |
| Increased local political competition (D72) | Lower infant mortality rates (J13) |
| Increased local political competition (D72) | Reduced corruption (H57) |
| Military's introduction of the sublegenda voting system (H56) | Increased local political competition (D72) |
| Higher political concentration before the military dictatorship (N43) | Better governance (H11) |