Small-Scale Industry, Environmental Regulation, and Poverty: The Case of Brazil |
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| Authors: | Jayaraman, Rajshri Lanjouw, Peter F. |
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| Affiliation: | Rajshri Jayaraman is an assistant professor at the University of Munich’s Center for Economic Studies; her e-mail address is jayaraman{at}lmu.de. Peter F. Lanjouw is a lead economist in the Development Research Group at the World Bank; his e-mail address is planjouw{at}worldbank.org. |
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| Abstract: | Governments and international development agencies have intensifiedefforts to promote small-scale enterprises as an engine of propoorgrowth. In Brazil, however, small-scale industries may alsobe responsible for the bulk of air pollution emissions. Althoughemployees of polluting small-scale industries in Brazil arenot disproportionately poor, simulations suggest that stringentenvironmental regulation resulting in widespread closures ofpollution-intensive small-scale industries would result in anonnegligible increase in poverty among employees of these firms.The results suggest that the enthusiasm for small-scale enterprisesneeds to be tempered by awareness of the potential environmentalcosts imposed by this sector. |
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