Transport infrastructure investment and regional inequalities in Brazil: an analysis of the impacts of the Growth Acceleration Program (PAC)

ABSTRACT The article analyses the effects of investments in infrastructure - in particular regarding transport sector carried out under the Growth Acceleration Program (PAC) - on the Brazilian regional dynamics. The hypotheses investigated in the study are: (i) infrastructure investments have contributed to the economic growth of the Brazilian states; (ii) PAC's infrastructure investments have helped to increase the economic growth rates of the Brazilian states, (iii) PAC's infrastructure investments have changed the dispersion of economic growth rates between states, in favor of poorer states. We employ the methodology of panel data for the estimates and bootstrapping for predictions. The empirical results only confirmed the first hypotheses, but not the last two ones, indicating that the PAC has not contributed significantly to amplify the average rate of growth of GDP per capita at state level; and also that PAC has not contributed to reduce regional inequalities.