Inclusive Sustainable Development ?

BRAZIL and the Middle Path

Marcelo Neri

USA

ChinaBrazil

Russia

India

1

10

20

30

40

50

60

70

80

90

100

Pe

rce

nti

le o

f W

orl

dw

ide

In

com

e D

istr

ibu

tio

n

1 25 50 75 100

Every Country

Source: Milotovic (2011) Year 2005 see Neri (2011)

Income distribution:

a worldwide comparison

“Brazil is everywhere in terms of the

world income distribution, from the

poorest to the richest”

Source: Milovic (2011) Year 2005 see Neri (2011)

Brazil as a Small World

1950 1960 1970 1980 1990 2009

2012

2000

2001Year

Gin

iC

oe

ffic

ien

t

.75

.65

.55

.45

0,535

0,5810,589

0,607

0,526

0,539

0,594

China Effect Chindia Effect

Inequality Across Nations

Brazil GDP Per Capita PPP in 2012

is 93,7% of the World Mean

Growth 2001-12:

3.49% Brazil X3,58% World

Inequality Within Brazil

Cummulative Growth 2001-2012(%)

120.2%

102.5%

92.1%

84.4%

77.3%

69.8%

58.9%

49.3%

36.7%

26.4%

1 2 3 4 5 6 7 8 9 10

Cu

mm

ula

tiv

eG

row

th (

%)

Per capita Income Deciles

Cummulative Real Per Capita Growth by

Income Deciles - Brazil

Source : IPEA, from microdata of PNAD/IBGE

2002 to 2012 – Annual Income Change

Source: IPEA, from microdata of PNAD/IBGE

Horizontal Inequality

Annual real growth of household income per capita

for selected groups, between 2002 and 2012

Mean

4.7 5.0 5.05.2

6.0

6.6

Small mucipality Incomplete Primary

Education

Northeast Blacks Rural area No education

% Population with Incomes

Below U$ 1,25 a day PPP

Fonte: IPEA / SAE a partir do Censo/IBGE

Extreme Poverty

Fonte: IPEA / SAE a partir do Censo/IBGE

% Population with Incomes

Below U$ 1,25 a day PPP

Poverty

6.47%

-13.75%

-28.54%

-40.24%-46.42%

-57.90% -58.22% -60.62%-63.01%

-69.29%-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Poverty Accumulated Variation since 2002

Millennium development goal

U$S 1,25 PPP - Day

Source: IPEA, from microdata by PNAD/IBGE

Component that

Explains

Proportion of extreme poor

% of total fall

Income growth 50,5%

Inequality fall 49,5%

Total 100

Dynamic breaking down

of poverty Changes in

Brazil, 2002-2012

Fonte: IPEA a partir dos microdados da PNAD/IBGE

What best explains inclusion ?

Growth or Equality ?

Middle Path

Determinants of Variations in Per Capita

Income Distribution Inequality* and Mean

BPCBolsa

Familia

Labour

Effect

Social Security

54,9% 76,41%

12,2% 2,35%

20,8% 19,33%

5,4% 2%

* Gini

In terms of inequality, what is the most

effective combination of social transfers?

Every additional R$ spent with Bolsa Familia

impacts inequality 369% e 86% more than

in social security and BPC, respectively.