A resource-rich neighbor is a misfortune: The spatial distribution of the resource curse in Braziledit
Méon, P-G & Phoebe W. Ishak (Freie Universität Berlin), 2019-2022
We study the spatial distribution of the effect of oil and gas revenues on Brazilian municipalities, using variations in their international prices to establish causality. Oil and gas revenues increase night-time light emissions in oil-producing municipalities but impose negative spillovers on neighbouring municipalities. Spillovers dominate in municipalities located more than 150 kilometers away from oil activities. The two effects cancel out at the level of micro-regions. In oil-producing municipalities, oil and gas revenues increase royalties, population, prices, crime, and real wages, particularly in manufacturing and services industries. Spillovers are negative on wages and prices, but positive on royalties and crime.