Coffee, Immigrants and Growth in Brazil

Abstract

How does an agricultural commodity affect development? Exporting commodities have generally been thought of as curses. I argue that the late nineteenth century coffee boom in Southeast Brazil triggered a mass European migration and transformed the local economy into a commercial society, both of which contributed to local development. I find that immigration left a local legacy of higher incomes, better public goods provision and higher quality fiscal governance, and that coffee affected development indirectly through its impact on immigration.

Keywords: Brazil, Immigration, Coffee, Human Capital, Public Goods, Local Governance, Growth

JEL Classification: N16, O47