Disease, Disparities, and Development: Evidence from Chagas Disease Control in Brazil

Because neglected tropical diseases (NTDs) afflict the world’s poorest people and can cause decades-long health problems, combating them could reduce inequality, the intergenerational transmission of poverty, and burdens on healthcare systems in developing economies. We show that these novel benefits arose from Brazil’s 1984-89 campaign to eliminate Chagas disease, an NTD that occurs almost entirely among poor, non-white, and rural Latin Americans and can cause chronic heart problems. Exploiting the pre-treatment presence of its main vector, we find that controlling it increased municipalities’ GDP per capita by 11.1% and reduced their Gini coefficients by 1.1% in the long run. Furthermore, childhoods free of exposure to this NTD increased the share of non-white adults in the top half of the income distribution by 1.4 percentage points (p.p., or 2.8%) and their children’s literacy rates by 0.44 p.p. (0.46%). Coinciding with the expected reduction in chronic symptoms, we also show that public spending on circulatory disease hospital care declined by 16%, contributing to an internal rate of return of 24% and an infinite marginal value of public funds. These results suggest that NTD control can improve the economic and fiscal health of developing countries while mitigating (racial) disparities and intergenerational cycles of poverty.