Chapter 9 - Stabilization of Relative Backwardness

Abstract

This chapter shows that Brazil faced a persistent fall in its relative per capita GDP over the 19th and early 20th centuries, but this was eventually halted, mostly in the early 20th century, with stabilization and even some recovery thereafter, depending on the country of comparison. It is argued that the engagement of the public sector in investments in education in the benchmark countries was not matched by similar effort in Brazil in the 19th century. There was a halt in the relative decline because of the immigration of Europeans and Japanese, which not only increased local human capital in Brazil but also raised its accumulation rate. Together with the maturity of public policies on education in the benchmark countries, this led to a halt of the widening of per capita income gap in the 20th century.