Income Redistribution, Poverty, and Territorial Inequality in Brazil

Abstract

Can centralized redistributive policies lead to unequal results among territories? This study gives an affirmative answer to this question and presents evidences that the redistribution of income at the interpersonal level, promoted by social policy in which both revenue and expenditure are centralized – Benefício de Prestação Continuada (BPC) (Continuous Cash Benefit Payment) - is not automatically translated into redistribution of funds among territories. Although the adoption of income transfer policies in the interpersonal level is important to reduce overall regional poverty, the welfare gains do not necessarily mean a reduction of the interregional disparities in Brazil. In circumstances where exogenous factors affect the equalizing effect of income spending - when spending does not follow the spatial distribution of necessity (social vulnerability concentration), centralized redistributive policies can contribute to the increase in territorial inequality.

KEYWORDS:
Public policies; income transfer; fiscal structure; social vulnerability; poverty