[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/grt/wpegrt/2017-09.html
   My bibliography  Save this paper

The ‘local economy’ effect of social transfers: A municipality-level analysis of the local growth impact of the Bolsa Familia Programme in the Brazilian Nordeste

Author

Listed:
  • Eric ROUGIER
  • François COMBARNOUS
  • Yves-André FAURE
Abstract
This paper analyses the various impacts of Conditional social transfers (CCTs) on the structure of production and economic growth at municipal level. CCTs impacts on local productive structures have seldom been analysed, although they condition prospects of future economic growth and income generation. We first develop a simple illustrative demand multiplier model with two types of municipalities to illustrate that social transfers’ local growth impact may vary with the pattern of local productive structure change, some patterns eventually driving the formation of a redistribution trap for the least productive local economies which could well threaten the economic inclusion long-term outlook of the programme. By using an original dataset mixing up information on productive structures, growth determinants and Bolsa Familia (BFP) transfers for the 184 municipalities of the Brazilian state of Ceará between 2003 and 2010, we then find that although transfers had an overall positive effect on municipalities’ local economic growth, they also exerted a negative indirect growth impact by orienting local production toward services and informality. Although we could not find support for the hypothesis of a redistribution trap, since we find a positive effect of transfers on the development of transformation industries in municipalities with limited initial industrial capacities, our estimations indicate that, on average, the growth impact of the Bolsa Familia programme could have been two times bigger, absent the adverse impact of social transfers on structural transformation. In addition, we explain that, by promoting services and informal occupations, including in light manufacturing industries, the BFP might cause a possible problem of quality of jobs in the future if additional policies promoting local productive development are not associated to social transfers.

Suggested Citation

  • Eric ROUGIER & François COMBARNOUS & Yves-André FAURE, 2017. "The ‘local economy’ effect of social transfers: A municipality-level analysis of the local growth impact of the Bolsa Familia Programme in the Brazilian Nordeste," Cahiers du GREThA (2007-2019) 2017-09, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2017-09
    as

    Download full text from publisher

    File URL: http://cahiersdugretha.u-bordeaux.fr/2017/2017-09.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2013. "The Political Resource Curse," American Economic Review, American Economic Association, vol. 103(5), pages 1759-1796, August.
    2. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    3. Alain de Janvry & Frederico Finan & Elisabeth Sadoulet, 2012. "Local Electoral Incentives and Decentralized Program Performance," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 672-685, August.
    4. Robinson, Sherman & Levy, Stephanie, 2014. "Can cash transfers promote the local economy? A case study for Cambodia:," IFPRI discussion papers 1334, International Food Policy Research Institute (IFPRI).
    5. Barrientos, Armando, 2012. "Social Transfers and Growth: What Do We Know? What Do We Need to Find Out?," World Development, Elsevier, vol. 40(1), pages 11-20.
    6. Raul Silveira Neto & Carlos Azzoni, 2011. "Non-Spatial Government Policies and Regional Income Inequality in Brazil," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 453-461.
    7. Ana Flávia Machado & Gustavo Geaquinto Fontes & Mariangela Furlan Antigo, 2011. "Assessment of the Implications of the Bolsa Família Programme for the Decent Work Agenda," Working Papers 85, International Policy Centre for Inclusive Growth.
    8. Taylor, J. Edward & Dyer, George A. & Yunez-Naude, Antonio, 2005. "Disaggregated Rural Economywide Models for Policy Analysis," World Development, Elsevier, vol. 33(10), pages 1671-1688, October.
    9. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
    10. Paulo Arvate & Enlinson Mattos, Fabiana Rocha, 2015. "Intergovernmental transfers and public spending in Brazilian municipalities," Working Papers, Department of Economics 2015_03, University of São Paulo (FEA-USP).
    11. Khemani, Stuti, 2015. "Buying votes versus supplying public services: Political incentives to under-invest in pro-poor policies," Journal of Development Economics, Elsevier, vol. 117(C), pages 84-93.
    12. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    13. Manuela Angelucci & Giacomo De Giorgi, 2009. "Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption?," American Economic Review, American Economic Association, vol. 99(1), pages 486-508, March.
    14. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    15. Sefa Awaworyi & Siew Ling Yew, 2014. "Government Transfers and Growth: Is there Evidence of Genuine Effect?," Monash Economics Working Papers 40-14, Monash University, Department of Economics.
    16. J. Edward Taylor, 2012. "A Methodology for Local Economy-Wide Impact Evaluation (LEWIE) of Cash Transfers," Working Papers 99, International Policy Centre for Inclusive Growth.
    17. Jair Do Amaral Filho & Maria-Cristina Pereira & Yves-André Fauré, 2013. "Une région périphérique dans un pays émergent : le Nordeste brésilien," Post-Print hal-01136500, HAL.
    18. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/generalized method of moments estimation and testing," Stata Journal, StataCorp LP, vol. 7(4), pages 465-506, December.
    19. Harold Alderman & Ruslan Yemtsov, 2014. "How Can Safety Nets Contribute to Economic Growth?," The World Bank Economic Review, World Bank, vol. 28(1), pages 1-20.
    20. Cavalcanti Ferreira, Pedro & Facchini, Giovanni, 2005. "Trade liberalization and industrial concentration: Evidence from Brazil," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 432-446, May.
    21. Ferrario, Marcela Nogueira, 2014. "The impacts on family consumption of the Bolsa Família subsidy programme," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    22. Litschig, Stephan, 2012. "Are rules-based government programs shielded from special-interest politics? Evidence from revenue-sharing transfers in Brazil," Journal of Public Economics, Elsevier, vol. 96(11), pages 1047-1060.
    23. Fried, Brian J., 2012. "Distributive Politics and Conditional Cash Transfers: The Case of Brazil’s Bolsa Família," World Development, Elsevier, vol. 40(5), pages 1042-1053.
    24. Laura B. Rawlings, 2005. "Evaluating the Impact of Conditional Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 20(1), pages 29-55.
    25. Stephan Litschig & Kevin M. Morrison, 2013. "The Impact of Intergovernmental Transfers on Education Outcomes and Poverty Reduction," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 206-240, October.
    26. Mateusz Filipski & J. Edward Taylor, 2012. "A simulation impact evaluation of rural income transfers in Malawi and Ghana," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 4(1), pages 109-129, March.
    27. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-192, January.
    28. Taylor, J. Edward & Filipski, Mateusz J., 2014. "Beyond Experiments in Development Economics: Local Economy-wide Impact Evaluation," OUP Catalogue, Oxford University Press, number 9780198707882.
    29. Armando Barrientos & Rachel Sabates-Wheeler, 2011. "Strategic complementarities and social transfers: how do PROGRESA payments impact nonbeneficiaries?," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3175-3185.
    30. Eustáquio Reis, 2014. "Spatial income inequality in Brazil, 1872–2000," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 15(2), pages 119-140.
    31. Maria Cecilia J. LUSTOSA & Yves-André FAURE, 2013. "Changements institutionnels et politiques publiques au Brésil\r\nAux sources de la réduction des inégalités sociales, de la pauvreté et des disparités régionales," Cahiers du GREThA (2007-2019) 2013-25, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tilman Brück & Oscar Mauricio Díaz Botía & Neil T. N. Ferguson & Jérôme Ouédraogo & Zacharias Ziegelhöfer, 2019. "Assets for Alimentation? The Nutritional Impact of Assets-based Programming in Niger," Journal of Development Studies, Taylor & Francis Journals, vol. 55(S1), pages 55-74, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rougier, Eric & Combarnous, François & Fauré, Yves-André, 2018. "The “Local Economy” Effect of Social Transfers: An Empirical Assessment of the Impact of the Bolsa Família Program on Local Productive Structure and Economic Growth," World Development, Elsevier, vol. 103(C), pages 199-215.
    2. Juan M. Villa, 2014. "Social Transfers and Growth: The Missing Evidence from Luminosity Data," WIDER Working Paper Series wp-2014-090, World Institute for Development Economic Research (UNU-WIDER).
    3. Villa, Juan M., 2014. "Social transfers and growth: The missing evidence from luminosity data," WIDER Working Paper Series 090, World Institute for Development Economic Research (UNU-WIDER).
    4. Harold Alderman & Ruslan Yemtsov, 2014. "How Can Safety Nets Contribute to Economic Growth?," The World Bank Economic Review, World Bank, vol. 28(1), pages 1-20.
    5. Palacios, Alfredo, 2016. "Impacto de los Programas de Transferencias de Ingresos en la Calidad de la Vivienda Familiar: Evidencia para el Plan de Inclusión Social, Argentina [Impact of Cash Transfer Programs on the Quality ," MPRA Paper 102482, University Library of Munich, Germany.
    6. Juan M. Villa, 2016. "Social Transfers and Growth: Evidence from Luminosity Data," Economic Development and Cultural Change, University of Chicago Press, vol. 65(1), pages 39-61.
    7. Solomon Asfaw & Silvio Daidone & Benjamin Davis & Josh Dewbre & Alessandro Romeo & Paul Winters & Katia Covarrubias & Habiba Djebbari, 2012. "Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour – Methodological Guidelines for the From Protection to Production Project," Working Papers 101, International Policy Centre for Inclusive Growth.
    8. Luis Henrique Paiva & Santiago Falluh Varella, 2019. "The impacts of social protection benefits on behaviours potentially related to economic growth: a literature review," Working Papers 183, International Policy Centre for Inclusive Growth.
    9. Stoeffler, Quentin & Mills, Bradford, 2014. "Households’ investments in durable and productive assets in Niger: quasi-experimental evidences from a cash transfer project," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170212, Agricultural and Applied Economics Association.
    10. Brockhaus, Jan & Kalkuhl, Matthias & Kozicka, Marta, 2016. "What Drives India’s Rice Stocks? Empirical Evidence," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235659, Agricultural and Applied Economics Association.
    11. Bruno Ćorić & Vladimir Šimić, 2021. "Economic disasters and aggregate investment," Empirical Economics, Springer, vol. 61(6), pages 3087-3124, December.
    12. Jacobus de Hoop & Jed Friedman & Eeshani Kandpal & Furio C. Rosati, 2019. "Child Schooling and Child Work in the Presence of a Partial Education Subsidy," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 503-531.
    13. Rajeev K. Goel & James W. Saunoris & Xingyuan Zhang, 2016. "Intranational And International Knowledge Flows: Effects On The Formal And Informal Sectors," Contemporary Economic Policy, Western Economic Association International, vol. 34(2), pages 297-311, April.
    14. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-192, January.
    15. Burger, John D. & Warnock, Francis E. & Warnock, Veronica Cacdac, 2018. "Currency matters: Analyzing international bond portfolios," Journal of International Economics, Elsevier, vol. 114(C), pages 376-388.
    16. Leonardo Becchetti & Pierluigi Conzo & Fabio Pisani, 2018. "Education and health in Europe," Applied Economics, Taylor & Francis Journals, vol. 50(12), pages 1362-1377, March.
    17. Puentes, Esteban & Wang, Fan & Behrman, Jere R. & Cunha, Flavio & Hoddinott, John & Maluccio, John A. & Adair, Linda S. & Borja, Judith B. & Martorell, Reynaldo & Stein, Aryeh D., 2016. "Early life height and weight production functions with endogenous energy and protein inputs," Economics & Human Biology, Elsevier, vol. 22(C), pages 65-81.
    18. Marcelo Castro & Enlinson Mattos & Fernanda Patriota, 2021. "The effects of health spending on the propagation of infectious diseases," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2323-2344, September.
    19. Iman Parsa & Mahyar Eftekhar & Charles J Corbett, 2022. "Does governance ease the overhead squeeze experienced by nonprofits?," Production and Operations Management, Production and Operations Management Society, vol. 31(8), pages 3288-3303, August.
    20. Sudhanshu Handa & Silvio Daidone & Amber Peterman & Benjamin Davis & Audrey Pereira & Tia Palermo & Jennifer Yablonski, 2018. "Myth-Busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa," The World Bank Research Observer, World Bank, vol. 33(2), pages 259-298.

    More about this item

    Keywords

    Conditional Cash Transfers; Bolsa Familia Programme ; Productive structure ; Municipalities ; Local economic growth ; Brazil;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:grt:wpegrt:2017-09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ernest Miguelez (email available below). General contact details of provider: https://edirc.repec.org/data/ifredfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.