Working Paper: NBER ID: w27456
Authors: Claudio Ferraz; Frederico Finan; Monica Martinez-Bravo
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; Economic development; Brazil; Military dictatorship
JEL Codes: D72; N46; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| political power concentration (D30) | economic development (O29) |
| military dictatorship (H56) | political competition (D72) |
| political competition (D72) | governance (G38) |
| governance (G38) | economic development (O29) |
| political power concentration (D30) | political competition (D72) |
| military dictatorship (H56) | economic development (O29) |