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Poverty changes in Manaus: Legacy of a Brazilian free trade zone?

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Date
2019
Link to item file
https://halshs.archives-ouvertes.fr/halshs-01245394
Dewey
Economie internationale
Sujet
Free trade zone; poverty; inequality; Manaus; Brazil
JEL code
I.I3.I32; F.F1.F14; F.F1.F16; D.D3.D31
Journal issue
Review of Development Economics
Volume
23
Number
1
Publication date
2019
Article pages
102-130
Publisher
Wiley
DOI
http://dx.doi.org/10.1111/rode.12560
URI
https://basepub.dauphine.fr/handle/123456789/20136
Collections
  • LEDa : Publications
Metadata
Show full item record
Author
Castilho, Marta
status unknown
Menéndez, Marta
status unknown
Sztulman, Aude
12772 Développement, institutions et analyses de long terme [DIAL]
163511 Laboratoire d'Economie de Dauphine [LEDa]
Type
Article accepté pour publication ou publié
Abstract (EN)
This study contributes to the literature on the social impacts of Special Economic Zones by analyzing poverty changes in the Brazilian state of Amazonas, where the Free Trade Zone of Manaus (FTZM) is located. Using census data, statistical micro‐decompositions and counterfactual simulations, we show that labor income was the major driver of poverty declines during the 2000 to 2010 decade in the municipality of Manaus (and all the more so for households with members working in the FTZM, who were less poor to start with). Comparison with ex‐ante “similar” municipalities, in regard to socioeconomic and demographic criteria, corroborates the relative success of Manaus in terms of poverty reduction as well as the essential role played by labor income. Wage regressions also show a significant FTZM premium effect for workers, though diminishing over time. In the rest of the state of Amazonas, nonlabor income remains the main factor for poverty reduction and the FTZM appears to have limited spillover effects, even at short distances. Our contrasting results illustrate both the benefits and limitations that trade and industrial policies face in underprivileged areas and suggest that a better targeting of social policies is needed to improve distributional outcomes and spillovers for the whole state.

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