Development that Works
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    This blog highlights effective ideas in the fight against poverty and exclusion, and analyzes the impact of development projects in Latin America and the Caribbean.
  • Beaches, sunshine and public pay

    19
    Oct
    2012

    By

     

    So it turns out according to recent research in the US, that public sector workers get better deals in nicer places.

    The presence of local amenities can grant public-sector workers a form of monopoly power that lets them extract more rents.

    People can only consume the beaches and sunshine of southern California, or benefit from the higher productivity of dense urban areas like Manhattan, by living nearby, and public-sector workers can therefore extract rents up to the point where those who pay the rents are induced to leave these high-amenity areas.

    Is this why the Brazilian government moved its capital from Rio to Brasilia half a century ago?

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