The Dutch Disease Gets a Brazilian

The Dutch disease – the economic hollowing-out and corruption effects of domestic resource exploitation – has an interesting twist when it happens in Brazil:

Oil windfalls and living standards: New evidence from Brazil
Francesco Caselli, Guy Michaels
, 20 January 2010

Does the “resource curse” exist? This column presents new evidence from Brazil. Municipalities that receive oil windfalls report significant increases in spending on infrastructure, education, health, and transfers to households. However, the windfalls do not trickle down and much of the money goes missing. Indeed, oil revenues increase the size of municipal workers’ houses but not the size of other residents’ houses. [Emphasis mine]

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