Rio de Janeiro's economy and the path dependence hypothesis:

the risk of lock-in based on mineral specialization

Abstract

In recent decades, Rio de Janeiro's economy has been characterized by specialization in the oil and natural gas extraction industry, while there have been signs of impoverishment of the state's economic complexity, as some traditional sectors of Rio de Janeiro's industry have been losing competitiveness. Despite the advocacy of harnessing the potential of the oil and natural gas production system, there are barriers to the state's economic diversification. For this reason, this essay proposes the hypothesis that the Rio de Janeiro economy has incurred a classic case of path dependence and a possible lock-in process, i.e. a narrowing of the alternatives to the path taken towards mineral specialization. The implication of the hypothesis is that the Rio de Janeiro economy will not escape the trap of the "curse of natural resources" unless there is a cohesive and decisive project not only to take advantage of the potential, but also to confront the powerful growing revenues generated by the oil economy.