Impact of nineteenth-century slavery on inequality in Brazil

PhD Defence on Development Economics in Brazil;

 How did you come to study those three topics?

I wanted to study issues that matter to development, i.e. inequality, infrastructure and fiscal capacity, using Brazil as a reference. I was also very curious to better understand the extent to which events in the past still influence development outcomes today. It motivated me and my co-author – Felipe Valencia, from the University of Bonn – to explore the effects of slavery on inequality, using colonial institutions to eliminate the problem of endogeneity between economic activities and location of slaves. The same curiosity led me to identify a historical telegraph line laid in the wilderness of the Amazon forest in the beginning of the twentieth century and to use it as an instrumental variable for the current road in order to evaluate its impact on development outcomes and deforestation. Finally, fiscal capacity is a topic that has attracted me from the outset of my professional career working in governments and international organisations.

Tell us about your findings.

In the first paper, “Tordesillas, Slavery and the Origins of Brazilian Inequality”, we find that the effect of slavery on income inequality, measured by the Gini coefficient, is 0.103, which corresponds to 20.7% of the average income inequality measure of our sample. The main channels of persistence identified are income racial imbalance, education racial imbalance and public institutions.

In the second paper, “From Telegraphs to Space: Transport Infrastructure, Development and Deforestation in the Amazon”, I find that for each kilometre’s distance from the highway, the income decreases on average by 0.10%. Transport infrastructure has also affected deforestation in the Amazon as it opens new frontiers for cattle farming and soybean agriculture. For each kilometre’s distance from the highway, the average percentage of trees per pixel increases from 2% to 9%. I also observe that in indigenous areas the forest coverage by pixel is 24% larger than in other areas.

In the third paper, “Ready to Tax: What Happens When Brazilian Municipalities Invest in Fiscal Capacity?”, I find that certain types of investments in fiscal capacity increase property tax revenues by USD 1.3 to USD 1.6 per capita annually, given that the average property tax revenue per capita of the full sample is USD 9.34. The results also show that the number of households in a municipality where waste is collected increases by 2,210 on average when the municipality invests in fiscal capacity in comparison to those that do not. In addition, I do not find evidence that investments in fiscal capacity affect re-election outcomes.