OECD Study on Regional Development in Brazil Mario Marcel Deputy Director Public Governance and...
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Transcript of OECD Study on Regional Development in Brazil Mario Marcel Deputy Director Public Governance and...
OECD Study on Regional Development in Brazil
Mario MarcelDeputy DirectorPublic Governance and Territorial Development OECD
I. Conceptual Framework
II. Key Facts
III. Key Policies
IV. Key Challenges
V. Conclusions
Brazil is among the most decentralised countries both in revenue and spending allocations
1- OECD Territorial Reviews
• Not limited to public finance and fiscal federalism approach(distribution of spending responsibilities, allocation of revenues, stability, etc.)
How can regional development policy help building a sustainable growth process in all regions?
• 17 National Reviews:
Canada (2002) Chile (2009) Czech Republic (2004)
Finland (2005) France (2006) Hungary (2001)
Italy (2001) Japan (2005) Korea (2001)
Luxembourg (2007) Mexico (2003) Norway (2007)
Poland (2008) Portugal (2008) Switzerland (2002, 2011)
Sweden (2010) Slovenia (2011)
3- Paradigm shift in regional policies
Traditional Regional Policies New Paradigm
ObjectivesBalancing economic
performances by temporary compensating for disparities
Tapping under-utilised regional potential for competitiveness
Strategies Sectoral approachIntegrated development
projects
Tools Subsidies and state aid Soft and hard infrastructures
Actors Central government Different levels of government
Unit of analysis
Administrative regions Functional regions
Redistributing from leading to lagging regions
Building competitive regions bringing together actors and
targeting key local assets
62.052.252.0
47.647.1
44.442.6
41.140.9
39.137.937.6
36.933.333.233.0
31.530.5
26.924.124.023.6
22.822.221.921.420.820.4
16.416.3
11.1
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0
IcelandSweden
BrazilCanada
AustraliaUnited States
FinlandMexicoKoreaJapanSpain
NorwayPortugalGreece
New ZealandOECD average
United KingdomTurkeyFrance
DenmarkGermany
AustriaBelgium
NetherlandsSwitzerland
HungaryIreland
ItalyCzech Republic
PolandSlovak Republic
Index of geographic concentration of population (TL2)
1- Concentration of population and of GDP are above OECD levels
Geographic concentration index of GDP and population (TL2), 2007
61.754.2
49.547.247.247.046.546.0
45.044.443.943.4
41.841.140.5
39.738.5
35.834.734.5
31.931.3
29.929.7
27.927.6
26.125.825.7
24.1
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0
BrazilSwedenIcelandCanadaFinlandGreece
United StatesAustralia
MexicoTurkeyJapanSpain
NorwayKorea
PortugalHungary
OECD averageNew Zealand
United KingdomFrance
BelgiumDenmark
AustriaIreland
GermanyCzech Republic
ItalyNetherlands
Slovak RepublicPoland
Index of geographic concentration of GDP (TL2)
Source: Calculations based on OECD Regional Database (2010) and data provided by IBGE.
2- Territorial disparities have decreased but remain high
0.36
0.33
0.30
0.26
0.25
0.25
0.22
0.19
0.18
0.17
0.16
0.15
0.14
0.14
0.13
0.13
0.12
0.12
0.120.12
0.11
0.11
0.10
0.08
0.07
0.07
0.07
0.07
0.06
0.00 0.10 0.20 0.30 0.40
Slovak RepublicBelgium
BrazilMexicoTurkeyIreland
HungaryCzech Republic
GreeceCanada
OECD averageGermany
United StatesItaly
PortugalPolandFinland
United KingdomAustria
NorwaySpain
DenmarkAustralia
New ZealandJapan
SwedenKorea
FranceNetherlands
Gini index of inequality of GDP per capita (TL2)
1995 2007
In catching-up economies inequality is high and it tends to rise due to the presence of growth poles…
0.25
0.26
0.27
0.28
0.29
0.3
0.31
0.32
0.33
1980
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Brazil (TL2)
… Brazil is an exception…
Territorial disparities have decreased since 1995 but remain high compared with OECD countries
Territorial disparities in GDP per capita within countries, (TL2), 2007
Gini index of inequality of GDP per capita across TL2 regions, 1980-2007
3- Most unsatisfied needs are concentrated in lagging regions
GDP per capita, access to health establishments and human development index, Brazilian TL2 regions
1. The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide . Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map. 2. This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.Source: Calculations based on data provided by (1) IBGE, (2) Ministério do Planejamento, Orçamento e Gestão. Estados and (3) CEPAL/ PNUD/OIT (2008) Emprego, desenvolvimento humano e trabalho decente: a experiencia brasileira recente.
4- There has been a process of convergence
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000 12 000 13 000 14 000
GD
P p
er c
ap
ita
gro
wth
in
PP
P 1
98
0-2
00
7
Initial GDP per capita in constant PPP 1980
Acre
Roraima
Mato Grosso do Sul
Pará
GoiásParaná
Mato Grosso
Minas Gerais
Amapá
Tocantins
Espírito Santo
Brazilian averageSanta Catarina
Rio Grande do SulSão Paulo
Amazonas
Distrito Federal
Rio de Janeiro
Pernambuco
Sergipe
Bahia
Ceará
Paraíba
Alagoas
Piauí
Maranhão
Rondônia
Level and growth of GDP per capita in TL2 Brazilian regions, 1980-2007
Source: Calculations based on data provided by IBGE.
20
60
100
140
180
220
260
300
340
20 60 100 140 180 220 260 300 340
2007 G
DP
pc (100=avera
ge o
f re
gio
ns)
1993 GDP pc (average of regions)
Brazil (TL2)
Rio de Janeiro
Distrito Federal
Rio Grande do Sul
Amazonas
São Paulo
Espirito Santo
Mato Grosso
Pará
A decline in disparities can be good or bad…
Shifting a policy based on disparities as a goal to one
fomenting growth potential in all regions…
5- Catching up has been driven mainly by advances in resource-intensive regions
GDP per capita growth and specialisation in agriculture and mining, Brazilian TL2 regions
Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.Source: Calculations based on data provided by IBGE.
1- A combination of policies is necessary
• Sustainable poverty reduction requires creating local jobs and growth
• Complementarities across policies are not sufficiently exploited– Improve co-ordination of policies– Target the relevant scale
• Regional development policy could reinforce the impact of social policies such as Bolsa Família
2- Resources for regional development are soaring, but target mainly private firms
Source: Sistema de Informações Geranciais dos Fundos Constitucionais de Financiamento (2000-09); IRPJ e IOF-Coordenação-Geral de Estudos Econômicos-Tributários – COGET/Receita Federal; Relatório de Execução Territórios da Cidadania Matriz 2008 and Relatório de Execução Plano de Execução 2009 Territories of Citizenship.
3- Public investment and BNDES funds still face difficulties reaching lagging regions
Regional allocation of PAC investments (2007-2010, per capita)
Source: Relatórios Estaduais. Totals for four years, 2007-10.
Regional allocation of lending by BNDES system (2007, per capita)
Source: BNDES website, www.bndes.gov.br.
1- Brazil faces multilevel governance challenges
• Overcoming multi-dimensional fragmentation of policies– “Contracts” are the most frequently used instruments in OECD countries– Ministerial Committee for Regional Policy in Denmark; Ministries of
Regional Development in Chile, Czech Republic, Poland, Slovenia or Slovak Republic
• Dealing with subnational governments financial and political autonomy– COAG in Australia
• Building institutional and administrative capacity at subnational level and increasing civil society participation– “Civic coalitions” in the USA
• Reducing information asymmetries, improving monitoring and evaluation– KOSTRA in Norway
2- Examples of existing tools for co-ordination in Brazil
• Laws– Fiscal Responsibility law
• Co-ordinating institutions– Committee for the Management of the PAC
• Convenios (agreements) and pacts– Pact to reduce mother and infant mortality
• Regional development agencies– Sudene
• Single Registry, national census, etc.
Key conditions for effective regional development
• Give high visibility and long term commitment
• Develop efficient vertical and horizontal co-ordination mechanisms
• Promote place-based policies
• Involve local actors