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Brazil is the world's sixth-largest economy, and for the first three-quarters of the twentieth century was one of the fastest-growing countries in the world. While the country underwent two decades of unrelenting decline from 1975 to 1994, the economy has rebounded dramatically. How did this nation become an emerging power? This book looks at the factors behind why this particular country has successfully progressed up the economic development ladder. The book examines the roles of beliefs, leadership, and institutions in the elusive, critical transition to sustainable development. Analyzing the last fifty years of Brazil's history, the book explains how the nation's beliefs, centered on social inclusion yet bound by orthodox economic policies, led to institutions that altered economic, political, and social outcomes. Brazil's growth and inflation became less variable, the rule of law strengthened, politics became more open and competitive, and poverty and inequality declined. While these changes have led to a remarkable economic transformation, there have also been economic distortions and inefficiencies that the book argues are part of the development process. This book demonstrates how a dynamic nation seized windows of opportunity to become a more equal, prosperous, and rules-based society.

Just as we learn from, influence, and are influenced by others, our social interactions drive economic growth in cities, regions, and nations—determining where households live, how children learn, and what cities and firms produce. This book synthesizes the recent economics of social interactions for anyone seeking to understand the contributions of this important area. Integrating theory and empirics, the book explores theoretical and empirical tools that economists use to investigate social interactions, and shows how a familiarity with these tools is essential for interpreting findings. It makes work in the economics of social interactions accessible to other social scientists, including sociologists, political scientists, and urban planning and policy researchers. Focusing on individual and household location decisions in the presence of interactions, the book shows how research on cities and neighborhoods can explain community composition and spatial form, as well as changes in productivity, industrial specialization, urban expansion, and national growth. It examines how researchers address the challenge of separating personal, social, and cultural forces from economic ones. It provides a toolkit for the next generation of inquiry, and argues that quantifying the impact of social interactions in specific contexts is essential for grasping their scope and use in informing policy. Revealing how empirical work on social interactions enriches our understanding of cities as engines of innovation and economic growth, the book carries ramifications throughout the social sciences and beyond.

Our path of economic development has generated a growing list of environmental problems including the disposal of nuclear waste, exhaustion of natural resources, loss of biodiversity, climate change, and polluted land, air, and water. All these environmental problems raise the crucial challenge of determining what we should and should not do for future generations. It is also central to other policy debates, including, for example, the appropriate level of public debt, investment in public infrastructure, investment in education, and the level of funding for pension benefits and for research and development. Today, the judge, the citizen, the politician, and the entrepreneur are concerned with the sustainability of our development. The objective of this book is to provide a simple framework to organize the debate on what we should do for the future. A key element of analysis by economists is the discount rate—the minimum rate of return required from an investment project to make it desirable to implement. The book outlines the basic theory of the discount rate and the various arguments that favor using a smaller discount rate for more distant cash flows. With principles that can be applied to many policy areas, the book offers an ideal framework for dynamic problems and decision making.

In the past three decades, developing countries have made significant economic and social progress, from improved infant mortality rates to higher life expectancy. Yet, 1.3 billion people continue to live in extreme poverty in the developing world, leading policymakers to place a renewed emphasis on policies that could promote economic efficiency and the productivity of the poor. How should these policies be sequenced and implemented to spur growth? Would a large, front-loaded increase in public infrastructure investment yield the desired growth-promoting effect? Taking a rigorous look at this kind of investment and its outcomes, this book explores the different channels through which public capital in infrastructure may affect growth and human welfare, and develops a series of formal models for understanding how these channels operate. Bringing together a vast amount of research in one unifying framework, the book finds that in considering investment in infrastructure, a variety of externalities need to be factored into analytical models and introduced in policy debates. Lack of access to infrastructure not only constrains the expansion of markets and private investment, it may also hinder the achievement of health and education targets. Ease of access, conversely, promotes innovation and empowers women by allowing them to reallocate their time to productive uses. Laying a solid foundation of economic facts and ideas, the book provides a comprehensive look at the critical role of public capital in development.

This book examines how countries use their productive resources—such as workers, skills, equipment and structures, and natural resources. It develops methods to assess the efficiency with which productive inputs are used, and how these efficiencies vary across countries and over time. The book finds that richer countries use skilled workers relatively more efficiently than unskilled workers, and equipment and structures relatively more efficiently than natural resources. They also are relatively more efficient users of labor than of capital. Technological change tends to make countries particularly efficient at using skills and less efficient at using capital. Technical change also favors experienced workers. In order to interpret and understand these findings, the book presents a theory of technology choice. In this theory, firms pick technologies that make the most efficient use of the most abundant production factors when these factors are good substitutes for the less abundant factors. Firms pick technologies that make the most of less abundant factors when other suitable factors are not available for substitution. For example, rich countries, where skilled workers are abundant, use skilled workers efficiently, as these are good substitutes for unskilled workers. This flexible framework can be applied to other pairs of inputs, over time, and across countries. The book has significant implications not only for the theoretical understanding of development and technological innovation, but also for government formulation of industrial policy and multinationals making decisions about what to invest in and where to make those investments.