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

Claudio Ferraz, Frederico Finan, Monica Martinez-Bravo

NBER Working Paper No. 27456
Issued in June 2020
NBER Program(s):Development Economics, Political Economy

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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Document Object Identifier (DOI): 10.3386/w27456

 
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