We explore the existence of a local �resource curse� related to Brazil�s oil reserves. To this end, we examine the effect of changes in international oil prices interacted with measures of oil access on nighttime light � a measure of economic activity � across the country�s localities. We detect no evidence of a resource curse: in fact, better access to oil enhances the positive effect of oil prices on economic activity. Our estimates indicate that a doubling of oil prices causes an average increase in luminosity of some 50 percent more in oil rich than in oil poor states; and 30 per-cent more, on average, in localities within 100 km distance to the nearest oil field relative to more remote localities. |
