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1. Follow the money: connecting anti-money laundering systems to disrupt environmental crime in the Amazon

Author:
Melina Risso, Carolina Andrade Quevedo, Lycia Brasil, Vivian Calderoni, and Maria Fe Vallejo
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Igarapé Institute
Abstract:
Environmental crime became the world’s third most lucrative illicit economy after drug trafficking and smuggling, with estimates of $110 to $281 billion in annual profits. Between 2006 and 2016, environmental crimes grew at a rate of 5% to 7% per year, a pace two or three times faster than that of global GDP growth. Money laundering is part of the criminal machinery that plunders the Amazon Rainforest. The study “Follow the Money: connecting anti-money laundering systems to disrupt environmental crime in the amazon” reveals the need for systems, agencies, and institutions responsible for preventing money laundering to turn their attention to the connections between this illicit practice and environmental crimes. The Igarapé study shows that the money laundering cycle follows three stages before the laundered funds can enter the financial system: placement, layering, and integration. However, not all proceeds from criminal activity are directly laundered into the formal financial system. Thus, informal diversification constitutes the process of moving illegal flows into the informal economy. It is estimated that 30% of the money to be laundered is used to pay the operating expenses of illicit economies. Cash transactions, divided into small amounts and deposited by “money mules,” are used to finance the hiring of precarious labor, accommodations, food, security, transportation, health services, leisure, and machinery, for example. The remaining 70% of illicit proceeds are formally inserted into the financial system. The study also recalls that the World Bank estimated in 2019 that governments lose between 6 and 9 billion dollars in tax revenue each year due to illegal logging. Similarly, other environmental crimes such as illegal mining, especially of gold and diamonds, generate between 12 and 48 billion dollars in revenue. In 2018, Interpol’s Global Illicit Flows Atlas found that illegal logging accounted for a percentage between 15% and 30% of the global timber trade, calculated between 51 billion and 152 billion dollars per year. The illegal logging industry is responsible for up to 90% of deforestation of tropical forests in African countries such as the Democratic Republic of Congo. Combating illicit financial flows is a powerful tool for dismantling illegal economies. It becomes even more relevant when it is identified that illicit financial flows fuel an ecosystem of environmental crime composed of a convergence of environmental and non-environmental crimes, such as corruption, fraud, tax evasion, and others.
Topic:
Security, Environment, Financial Crimes, Money Laundering, and Illicit Financial Flows
Political Geography:
Brazil, South America, and Amazon Basin

2. Trade Shocks and Social Mobility: The Intergenerational Effect of Import Competition in Brazil

Author:
Andrés César, Matias Ciaschi, Guillermo Falcone, and Guido Neidhöfer
Publication Date:
07-2023
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using an instrumental variable strategy on survey data with retrospective information on parental employment, we study the consequences of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantial for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility.
Topic:
Trade, Imports, Economic Competition, and Social Mobility
Political Geography:
Brazil and South America

3. The Impact of Robots in Latin America: Evidence from Local Labor Markets

Author:
Irene Brambilla, Andrés César, Guillermo Falcone, and Leonardo Gasparini
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We study the effect of robots on labor markets in Argentina, Brazil, and Mexico, the major robot users in Latin America, during the period 2004{2016. We exploit spatial and time variations in exposure to robots arising from initial differences in industry specialization across geographic locations and the evolution of robot adoption across industries, to estimate a causal effect of robots on local labor market outcomes. We find that district’s exposure to robots causes a relative deterioration in labor market indicators such us unemployment and labor informality. We document that robots mainly replace formal salaried jobs, affecting young and semi-skilled workers to a greater extent, and that informal employment acts as a buffer that prevents a larger increase in unemployment.
Topic:
Unemployment, Robotics, Labor Market, and Informal Economy
Political Geography:
Brazil, Argentina, Latin America, and Mexico

4. Social Policy Expansion and Retrenchment After Latin America’s Commodity Boom

Author:
Sara Niedzwiecki and Jennifer Pribble
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
The literature on social policy expansion and retrenchment in Latin America is vast, but scholars differ in how they explain the outcomes, arriving at different conclusions about the role of democracy, left parties, favorable economic conditions, and social movements in shaping reform. What can welfare state developments since the end of the commodity boom teach us about the theoretical power of these arguments? This paper engages this question, seeking to explain recent incidents of social policy reform in 10 presidential administrations in Argentina, Brazil, Chile, and Uruguay. Using a combination of crisp-set qualitative comparative analysis (csQCA) and case studies, we identify multiple paths toward social policy expansion and retrenchment that involve the absence and presence of electoral competition, economic resources, party ideology and linkage mechanism, social movement pressure, international pressure, and legacies. The results show that while both parties of the left and right expanded social programs, only the right engaged in retrenchment, yet partisanship alone is insufficient for explaining reform outcomes, as the variable must appear in combination with other factors depending on the party’s linkage mechanism. The results provide new insight into the politics of social policy reform in Latin America, showing the relevance of complex forms of causality.
Topic:
Health, Poverty, Social Movement, Democracy, Inequality, Public Policy, and Political Parties
Political Geography:
Brazil, Argentina, South America, Uruguay, Latin America, and Chile

5. Anticompetitive practices on public procurement: Evidence from Brazilian electronic biddings

Author:
Antonio Sampaio, Paulo Figueiredo, and Klarizze Puzon
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using big data from the Brazilian public procurement system, this research aims to investigate what factors are associated with the occurrence of anticompetitive practices in electronic bidding. Our analysis considers all services contracted between 2014 and 2017. The study uses the logit regression model with a dependent binary variable to model the probability of bidding fraud as a function of a vector of explanatory variables composed of the characteristics of the bidding process and of the supplier, in terms of firm size, thus quantifying the relationship between the explanatory variables and the probability of fraud occurrence. We find that firm size and the Apparent Overbilling Index which we propose are associated with the occurrence of fraud and anticompetitive practices in electronic auctions. This study contributes to the accumulation of empirical and theoretical knowledge, expanding safer bases for governments and society in the fight against corruption.
Topic:
Fraud, Economic Competition, and Public Procurement
Political Geography:
Brazil and South America

6. Affirmative action with no major switching: Evidence from a top university in Brazil

Author:
Rodrigo C. Oliveira, Alei Santos, and Edson Severnini
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Affirmative action in higher education may lead to mismatch, a situation where students benefiting from preferential admission struggle with their college-level work because of poor precollege academic preparation. In the United States, those students can switch majors if they underperform in the originally intended major. Only in the extreme may they drop out. What happens when major switching is not allowed? In this paper, we examine the margins of adjustment for beneficiaries of affirmative action in a top university in Brazil, where prospective students must choose a major prior to the entrance test, and cannot switch it while in college. Surprisingly, we do not find a larger effect on dropout rates relative to the United States, and also provide evidence of strong catching up for students who remain in school. Because they fail more courses early on, to successfully graduate students benefiting from preferential admission end up reducing the number of credit hours taken in the first and second college years, but compensate by taking more credit hours in the final years.
Topic:
Higher Education, Students, and Affirmative Action
Political Geography:
Brazil and South America

7. The Military’s Return to Brazilian Politics

Author:
Tricontinental: Institute for Social Research
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
Throughout history, the Brazilian Armed Forces have looked inwards towards their own territory and peoples. They are centred around the construction of an ‘internal enemy’ to justify its tactics, strategies, and accumulation of forces. The art for this dossier highlights emblematic ‘internal enemies’ constructed throughout history. These portraits, placed alongside other historical artifacts, rekindle a collective memory. They are, in fact, portraits of ourselves – the people, the poor, and the dispossessed – in the act of resistance.
Topic:
Politics, Military Strategy, Military Affairs, and Civil-Military Relations
Political Geography:
Brazil and South America

8. Salmonella Program in the European Union and the Trade Dispute with Brazil at the World Trade Organisation: A Partial Equilibrium Framework

Author:
Mahdi Ghodsi
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This contribution provides a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a prohibitive regulatory non-tariff measure (NTM) in the form of a sanitary and phytosanitary (SPS) measure aimed at a foreign product with perceived negative characteristics. Two groups of consumers are distinguished: one that is indifferent to the foreign product’s negative attributes, and another that is concerned about them. Different scenarios concerning the welfare gains from the introduction of an NTM are explored. The results depend on consumer awareness and information policies pursued by the government of the importing country or group of countries. The theoretical model is illustrated with data on the production and importation of prepared poultry in the EU. This paper focusses on the recent Dispute Settlement (DS) case 607 at the World Trade Organization (WTO) that was initiated by Brazil in November 2021 to consult with the EU on restrictive measures imposed on the importation of prepared and preserved poultry. These restrictions are in line with the comprehensive and restrictive programme legislated by the EU to combat salmonella spp. The findings suggest that the consumer surplus may be reduced after the imposition of prohibitive SPS measures because the market structure changes from a duopoly to a monopoly. However, when the perceived harm of the bad product increases and the portion of the concerned population in society regarding the bad product increases, the change in the consumer surplus also increases.
Topic:
World Trade Organization, European Union, Welfare, Trade Policy, and Disputes
Political Geography:
Europe, Brazil, and South America

9. Partnerships for Policy Transfer: How Brazil and China Engage in Triangular Cooperation with the United Nations

Author:
Laura Trajber Waisbich and Sebastian Haug
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper offers a comparative analysis of Brazilian and Chinese partnerships with the United Nations (UN) as a mechanism and channel for policy transfer. In international policy travel flows, China and Brazil currently hold privileged places as hubs from which development-related policies travel and through which they circulate. Both countries have invested in systematising their development experience and transferring development policies within their regions and beyond – often through triangular cooperation, i.e. South–South cooperation supported by third actors such as UN entities. So far, however, this variegated engagement has remained under the radar of scholarly attention. To address this gap, we examine 35 policy transfer partnerships – 17 for Brazil and 18 for China – forged with different parts of the UN system over the last two decades. In order to offer a first systematic account of partnership trajectories, we provide an overview of partnership types (namely projects, programmes and policy centres) and transfer dimensions (including the policies themselves, transfer agents and governance arrangements). Our comparative mapping presents an evolving landscape: while Brazil was first in institutionalising robust policy transfer partnerships with numerous UN entities and then slowed down, China started more cautiously but has significantly expanded its collaboration with the UN system since 2015. The partnerships analysed cover a substantial range of sectors, with a particular focus – for both Brazil and China – on agricultural policies. While Brazilian partnerships with the UN primarily engage with linkages between agriculture and social protection, however, China–UN partnerships focus more on productivity and market linkages. As the first comprehensive mapping and comparative analysis of Brazilian and Chinese policy transfer partnerships with the UN, this paper contributes to a better understanding of (triangular) cooperation schemes between international organisations and their member states, as well as debates about how policies deemed as successful travel around the globe.
Topic:
Development, International Cooperation, United Nations, and Partnerships
Political Geography:
China, Asia, Brazil, and South America

10. Why Brazil Sought Chinese Investments to Diversify Its Manufacturing Economy

Author:
Celo Hiratuka
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since the beginning of the twenty-first century, economic relations between Brazil and China have grown significantly. The main driver of this process has been China’s enormous demand for agricultural, energy, and mineral commodities. On the one hand, Brazil’s strong competitiveness in these products has helped the country consolidate its role as an important supplier to China, increasing exports and turning China into the main destination for Brazilian exports since 2009.1 On the other hand, China, by virtue of its status as the “factory of the world,” has established itself as the main supplier of manufactured products to Brazil.2 Nonetheless, Brazilian scholars, think tanks, and private manufacturing firms have raised concerns. They have done so despite the great boost in bilateral trade flows; the favorable trade balance for Brazil; and the leveraging of businesses in several Brazilian sectors such as soybeans, iron ore, and oil. These concerns are related to the excessive concentration of Brazilian exports in a few products, the environmental impacts of these exporting activities, and the effects of strong Chinese manufacturing competition on Brazil’s domestic market. These worries have become more significant when one considers the growing importance of manufacturing changes with the diffusion of Fourth Industrial Revolution technologies and the search for new renewable energy sources and environmental sustainability. For Brazil, this matter reflects a need to advance bilateral relations beyond existing export trade volumes and toward new drivers of more diversified economic growth that will help the country escape a specialization in commodities. The fortunes of the Chinese company BYD in Brazil are highly relevant to these trends. BYD is a company that has diversified from the production of batteries into different innovative industrial sectors, such as renewable energy and electric vehicles. BYD has also been expanding rapidly in international markets, and in that process it chose Brazil as an important market, where it has built factories to produce electric bus chassis, photovoltaic panels, and batteries for electric buses. BYD’s trajectory in Brazil certainly has not been smooth. On the contrary, the firm has had to adapt to market fluctuations and, above all, to changes in the Brazilian government’s economic policies, which have made the company’s experience in the country quite turbulent. Despite this, BYD survived its first years in Brazil and more recently has been showing signs of continuing to invest in the Brazilian market. Analysis of BYD’s experience in Brazil shows, on the one hand, that there are important possibilities for new economic relations with China that go beyond trade in commodities, with productive investments that can potentially help Brazil simultaneously incorporate more knowledge-intensive activities and drive positive environmental impacts by generating renewable energy and reducing carbon emissions. On the other hand, the story of BYD also shows that the transformation of these possibilities into effective benefits requires coordinated actions on the part of Brazilian policymakers to offer a long-term horizon for Chinese investments. In that spirit, Brazil must craft a long-term strategy for its economic relationship with China to increase the odds that bilateral engagement can advance in a new and more sustainable, mutually beneficial direction.
Topic:
Bilateral Relations, Economy, Investment, Manufacturing, and Engagement
Political Geography:
China, Asia, Brazil, and South America

11. Inclusion amid ethnic inequality: Insights from Brazil’s social protection system

Author:
Natasha Borges Sugiyama
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Policy frames in Brazil have long run up against conflicting visions and understandings about the causes and consequences of group-based inequality. This paper argues that a class-based lens has dominated the social protection framework. In recent years, political leaders have framed social policy measures along ‘universal’ class lines with the aim of improving poverty and wellbeing. This framing is reflective of Brazil’s national narrative on race relations and the idea that class and employment status have been the most salient barriers to social welfare protections. Brazil’s widely well-regarded anti-poverty conditional cash transfer programme, Bolsa Família (2003–21), is emblematic of the country’s universal and ‘race-blind’ approach to social policy. But given the strong correlation in Brazil between ethnicity and income, social protection policies such as the Bolsa Família have indirectly targeted vulnerable black and brown citizens. The analysis addresses how social policy has contributed advances to wellbeing in general and for Afro-Brazilians. A comparative perspective on social welfare systems offers important lessons on how poverty relief can further human development and enhance agency. Future reformers can learn from Brazil’s pursuit of poverty reduction alongside administrative procedures that identify vulnerable groups, as a strategy to address intersectional inequalities of ethnicity and class.
Topic:
Poverty, Race, Inequality, and Welfare
Political Geography:
Brazil and South America

12. Inventory of data on economic activity and deforestation in the Amazon Basin

Author:
Igarapé Institute
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Igarapé Institute
Abstract:
Multiple factors shape land change and land use patterns in the Amazon Basin.This note aims to identify data sources for two specific phenomena: changes in land cover and GHG emissions. It also considers key economic sectors that accelerate deforestation including livestock and agricultural development. To this end, the focus is on available data sources across three countries with an analysis of their geographic scope, depth of detail, and the frequency and periodicity with which they are reported.
Topic:
Security, Climate Change, Environment, Economy, Carbon Emissions, and Deforestation
Political Geography:
Brazil, South America, and Amazon Basin

13. Connecting the Dots: Territories and Trajectories of Environmental Crime in the Brazilian Amazon and Beyond

Author:
Laura Trajber Waisbich and Terine Husek
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Igarapé Institute
Abstract:
A new study by the Igarapé institute analyzing more than 300 Federal Police operations between 2016 and 2021 found that environmental crime in the Amazon region is not only organized but far more than a local problem. Indeed, this vertibable criminal ecosystem behind Amazon plunder has expanded nationwide, reaching 24 of Brazil’s 27 states as well as neighboring nations. According to the study “Connecting the Dots: Territories and Trajectories of Environmental Crime in the Brazilian Amazon and Beyond”, published Wednesday July 20, the federal operations flagged criminal networks in 846 venues across Brazil and the region. This article is the latest in our series “Mapping Environmental Crime in the Amazon Basin.” The police ops focused largely on the nine states comprising Brazil’s Legal Amazon region, where spreading criminal activities took investigators to 197 municipalities, representing 75% of total interventions. Police also targeted environmental crimes in 57 Brazilian municipalities outside the Amazon region, and another eight cities in neighboring countries. The Federal Police interventions were triggered by unchecked deforestation associated with a variety of unlawful economic activities, from outright crimes to nominally licit market activity tainted by crime. These include illegal timber extraction, illicit mining (especially gold), land grabbing and predatory farming and ranching. This criminal network was first explored in Igarapé’s strategic paper, published earlier this year, “The Ecosystem of Environmental Crime in Amazonia: An Analysis of Illicit Economies in the Forest.” The current study takes a deeper dive into the widening criminal nexus that undergirds environmental crimes and related offenses, including illegal money flows, tax evasion, corruption, fraud and criminal violence.
Topic:
Crime, Environment, Law Enforcement, Deforestation, and Illicit Financial Flows
Political Geography:
Brazil, South America, and Amazon Basin

14. Therapeutic Communities in Brazil

Author:
Mauricio Fiore and Taniele Rui
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Social Science Research Council
Abstract:
Spread across Brazil and attaining an unparalleled political force, therapeutic communities are as inescapable in the debate on drug policy as they are complex to define. Although they are not a Brazilian creation, they have been operating in that country for decades, and their dissemination intensified in the 1990s. In 2011, they were officially incorporated into Brazil's Psychosocial Care Network (Rede de Atenção Psicossocial, or RAPS). Since then, therapeutic communities have been at the center of public debates about their regulation; about how they should—or even if they should—be a part of the healthcare system; about the level of supervision to which they should be submitted; about their sources of funding, particularly whether or not they should have access to public funding; and, most importantly, about the quality of the services they offer and the many reports of rights violation that have been made public. However, a well-informed public debate can only flourish if the available information is based on sound evidence. The SSRC’s Drugs, Security and Democracy Program is concerned with the policy relevance of the research projects it supports, and the debate around therapeutic communities in Brazil points to a clear need for impartial research that addresses different cross-cutting aspects of this topic in its various dimensions: legal, regulatory, health, and observance of human rights, among others. It is in this context that we publish this working paper series on therapeutic communities in Brazil. The eight articles that compose this series offer a multidisciplinary view of the topic, expanding and deepening the existing literature and offering powerful contributions to a substantive analysis of therapeutic communities as instruments of public policy. Although they can be read separately, it is as a whole that the strength of the eight articles that make up this series becomes more evident. Even though they offer different perspectives, they are complementary works in—and already essential for—delineating and understanding the phenomenon of therapeutic communities in Brazil.
Topic:
Health, Health Care Policy, Domestic Policy, and Community
Political Geography:
Brazil and South America

15. What Railway Deals Taught Chinese and Brazilians in the Amazon

Author:
Adriana Erthal Abdenur, Maiara Folly, and Maurício Santoro
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the past decade, Chinese investments in Brazil have expanded and diversified considerably, especially ones involving infrastructure. Chinese investors have also diversified geographically. Increasingly, major Brazilian infrastructure projects are being planned or implemented with Chinese backing in environmentally sensitive regions such as the Amazon rain forest and the Cerrado, a large savanna region in Central-West Brazil. Chinese actors have become directly involved in such projects against a backdrop of sharpening debates about sustainability and other consequences of large-scale infrastructure projects. This is especially true in protected areas such as land populated by Indigenous groups and conservation units. A notable example is the Ferrogrão project, a major railway line designed to cross sections of the Amazon and Cerrado to deliver goods to Brazilian ports. This paper examines the diverse ways that Brazilian and Chinese actors have learned from each other as they negotiate the terms of these deals. It also explores how these learning processes have been conditioned by intense domestic political debates over these projects in Brazil. Official documents and secondary sources reveal that, rather than a set Chinese way of doing business or a stock Brazilian response, such projects entail dynamic institutional learning. Such learning is shaped not only by the particulars of the Ferrogrão project but also by Chinese actors’ broader engagement with Brazilian infrastructure projects over the past ten years.
Topic:
Environment, Infrastructure, Investment, and Sustainability
Political Geography:
China, Asia, Brazil, South America, and Amazon Basin

16. Assessing the Economic, Societal and Cultural Benefits of YouTube in Brazil

Author:
Oxford Economics
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Read how Oxford Economics and YouTube partnered to identify the economic and societal benefits of YouTube in Brazil. Through our rigorous economic modelling and survey capabilities, we found that, in 2020, YouTube contributed R$3.4 billion to Brazil’s GDP and 122,000 full-time equivalent jobs. Our research shows that YouTube fosters significant positive trends for Brazil’s creators in terms of professional goal achievement, business growth, and improved practical skills, as well as serving as a vital resource for teachers and learners
Topic:
Economics, GDP, Social Media, and YouTube
Political Geography:
Brazil and South America

17. CoronaShock and Education in Brazil: One and a Half Years Later

Author:
Tricontinental: Institute for Social Research
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
This dossier seeks to assess the effects of CoronaShock on education in Brazil, in particular how a mercantile logic advanced through the pandemic and how large corporations in the sector took advantage of the crisis. It documents the actions of private corporations, changes in the educational model, the impact on workers in the sector, and the challenges facing a programme of struggle.
Topic:
Education, Governance, Pandemic, and COVID-19
Political Geography:
Brazil and South America

18. The Challenges Facing Brazil’s Left

Author:
Tricontinental: Institute for Social Research
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
Brazil is living through a reactionary situation led by far-right President Jair Bolsonaro, who relies on the social support and approval of the country’s ruling classes and Armed Forces. Meanwhile, the Brazilian left aims to regroup and recreate its social base as it tries to regain the political stewardship of the country. Through interviews with leaders of popular movements and parties in Brazil, dossier no. 40 analyses the challenges facing Brazil’s left in this difficult reality.
Topic:
Governance, Military Affairs, Far Right, and Leftist Politics
Political Geography:
Brazil and South America