The imbalances and regional disparities that persist in most developing countries often compound problems of economic development and income distribution. Moreover, alternative development strategies have different impacts on regional economies within a particular country. Understanding the problem of unequal development within countries is of concern to regional scientists, economists, and other scientists, but the paucity of multiregional social and economic data limits empirical research on this problem. The objectives of this project are twofold: (1) development of methods for constructing multiregional social accounts data from limited and uncertain information and for applying these methods to the study of Brazil, and (2) development of a multiregional, computable general equilibrium model that provides a framework for analyzing unequal regional development. The investigators will estimate the social accounts for the Northeast region of Brazil and for the rest of the nation as whole. These social accounts will also separate each region into urban and rural sectors. The methods will use partial data on regional transactions gathered from several surveys and will adapt Stone's procedures for treating unknown or unbalanced economic data as a restricted or constrained statistical estimation problem. The study will contribute to our understanding of the multiregional development process in Brazil and in other developing countries by providing an alternative method to sectoral analysis as a means of explaining regional disparity in the development process. The results will serve as a guide to the construction of multiregional social accounting matrices (SAMs) from limited and incomplete information. The development of the proposed model, along with the results of simulation exercises to probe the relationship between macro-economic policy, regional development and income distribution, will add to the empirical evidence on the impact of alternative economic policies and changes in external economic factors on regional growth in developing economies. This research therefore will contribute to our broader understandings of the development process and to the likely efficacy of various policies designed to stimulate development.
