Deforestation and human development in the Brazilian tropical dry forest

Abstract The relationship between deforestation and human development is contested in Latin America and may vary between biomes. We evaluated the boom-bust hypothesis across agricultural frontiers in the Brazilian Caatinga dry forest, using panel data (1991-2000-2010) and cross-sectional data (2010) from 1207 municipalities. Municipalities in the advanced deforestation stage (> 66% forest cover lost) had the best development outcomes in 1991 yet by 2010 no indicators were superior to those of intermediate (33 > 66%) and initial stages (< 33%). Initial stage municipalities showed least improvement in development metrics across time, whereas progress was quicker within intermediate frontier stages. Relative improvements in longevity, poverty alleviation, income inequality, and child mortality did not result in a “bust”, but instead, progress stagnated in advanced stage municipalities. Our cross-sectional analysis used a quasi-experimental approach and control for spatial autocorrelation and revealed a relative boom-bust in five of six development indicators. Overall, we find strong evidence that exploitation of natural resources is insufficient for achieving sustained development progress.