Transport Infrastructure and Regional Development in Brazil

Abstract

This paper analyses the impacts of the implementation of a transportation infrastructure project over the regional and national economic growth and its contribution to the decrease of the regional disparities in Brazil, as far as accessibility is concerned. This paper takes, as an illustrative case, the impact of the partial duplication of the highway BR–116, which is the main route between the Northeast region and the Center-South of the country. The methodological framework consists in the integration of a transportation model with the MIBRA model, an interregional applied equilibrium model of the Brazilian economy. The transportation model measures the change in the interregional distance and the accessibility to transport investment, while the MIBRA model estimates the spatial economic effects of the projects on the variables described above. The benchmark year is 1999. The model was constructed for six Brazilian regions, North, Northeast, Southeast, Center-West, South and Sao Paulo, and has details for twenty nine industries. In the simulation, the BR-116 highway has being duplicated by a total of 1,724 km. Overall the results show an increase in Brazilian GDP. In the short run, the change of the main economics indicators (GDP, demand of families and employment) is positive to almost all of the regions, with the Northeast region, the poorest one, being the more beneficiated, considering the GDP change. However, in the long run, in spite of positive changes in the GDP, the negative change in the employment level in the Northeast region persists. Despite the employment result, it is possible to verify that the duplication of BR-116 is capable of generate a propitious trade flow to the poorest regions of the country and to contribute to an increase in the production level, mainly in the Northeast region. As far as accessibility is concerned, it is possible not only to have access to cheaper inputs, but also to expand the production of more competitive products either to the domestic or to the external market.