Political Power, Elite Control, and Long-Run Development: Evidence from Brazil

57 Pages Posted: 29 Jun 2020

See all articles by Claudio Ferraz

Claudio Ferraz

University of British Columbia (UBC) - Vancouver School of Economics

Frederico Finan

University of California, Berkeley - Department of Economics; IZA Institute of Labor Economics

Monica Martinez-Bravo

Centre for Monetary and Financial Studies (CEMFI)

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Date Written: June 2020

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.

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Suggested Citation

Ferraz, Claudio and Finan, Frederico and Martinez-Bravo, Monica, Political Power, Elite Control, and Long-Run Development: Evidence from Brazil (June 2020). NBER Working Paper No. w27456, Available at SSRN: https://ssrn.com/abstract=3637758

Claudio Ferraz (Contact Author)

University of British Columbia (UBC) - Vancouver School of Economics ( email )

997-1873 East Mall
Vancouver, British Columbia V6T 1Z1
Canada

Frederico Finan

University of California, Berkeley - Department of Economics ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Monica Martinez-Bravo

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

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