Examine the costs and benefits of fiscal wars between Brazilian states
Latin American Business examines Brazil’s use of fiscal incentives to attract investors to help remedy disparities in the country’s regional distribution of income. Since the 1990s, individual Brazilian states have taken the initiative in trying to lure domestic and foreign firms to locate within their borders, targeting the automotive industry, textiles, and shoe production. But their efforts have led to mixed results and questions about whether these fiscal wars have been legitimate attempts at regional economic development or simply a distortion in the allocation of resources. This insightful collection of case studies and essays sheds considerable light on the issue.
For several generations, the notion has been debated both in advanced industrial countries and in developing countries that regional differences in income will gradually be eliminated as poor regions (where money is scare but labor is not) benefit from the inflow of investments. In reality, this has rarely happened; Latin American Business examines why that has been the case in Brazil. The book’s contributors fuel this continuing debate, analyzing topics that include Bahia’s efforts to attract a Ford plant, the Mercedes-Benz project in Juiz de Fora, the case of Renault in Paraná, fiscal incentive programs in Pernambuco, and the tax incentive policies of Ceará.
Latin American Business includes: