A history of inequality: top incomes in Brazil, 1926–2015

Produced by: 
United Nations Department of Economic and Social Affairs (UN/DESA)
Available from: 
April 2017
Paper author(s): 
Pedro H. G. Ferreira de Souza
Poverty - Inequality - Aid Effectiveness

This paper uses income tax tabulations to estimate top income shares in Brazil over the long term. Between 1926 and 2015, the concentration of income at the top remained very high, following a sine wave trend: top shares ebbed and flowed over time, frequently in tandem with political and institutional disruptions. There is some evidence in favour of Williamson’s ‘missed levelling’ hypothesis regarding the origins of Latin America’s exceptionally high levels of inequality, but the recent decline in inequality is cast in a more dubious light, since top income shares have remained quite stable since 2000 and the ‘tax-adjusted’ Gini coefficients show a smaller and shorter, though still sizeable, decrease. The nature of the political regime matters, but democracy is not a sufficient condition for redistribution. Brazil’s tumultuous political history suggests top income shares change substantially mostly during political-institutional crises, when the typical quid pro quo of more liberal regimes in normal times collapses. The analysis is complemented by international comparisons and a discussion of the role of institutions in shaping inequality.


Research section: 
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