Research on World Agricultural Economy

Agricultural Economic Growth in Immediate Regions of Mato Grosso, Brazil: The Impact of Institutional Changes since the Military Regime

Daves Cordova

UFMT

Diego Procópio

Department of Animal Science and Rural Extension, Federal University of Mato Grosso, Cuiabá 78060-900, Brazil

Alexandro Ribeiro

Faculdade de Economia, Universidade Federal de Mato Grosso

Leonardo de Souza

Faculdade de Economia, Universidade Federal de Mato Grosso

Arturo Zavala

Faculdade de Economia, Universidade Federal de Mato Grosso

DOI: https://doi.org/10.36956/rwae.v7i3.2783

Received: 26 September 2025; Published: 16 July 2026

Abstract

This article examines the reason why growth in Mato Grosso's Immediate Regions has been diverging since the 1960s. The hypothesis is that difference came from the institutional changes, which were initiated during the Military Regime (1964–1985). This theoretical framework applies New Institutional Economics with an augmented Solow growth model, to investigate how the preexisting extractive institutions were replaced by inclusive ones, namely Land Market and Transports, to modify the path of regional development. The methodology applies an estimation by Two-Stage Least Squares (2SLS) regression and a Spatial Durbin Model (SDM) with Agricultural Census data, from 1975 to the 2006. The findings reveal a significant regional division driven by these two institutions. Regions integrated into new infrastructure hubs and marked by the effects of Land Market, such as Sorriso along BR-163 and Primavera do Leste along BR-070, exhibited increasing returns to scale and reduced transaction costs. This institutional quality led to the division, which marks the emergence of a new institution, Rural Enterprise, which is the synthesis of the previous two. Conversely, regions with former institutions, remnants of the colonial era, such as Cáceres, experienced stagnation. Therefore, the study empirically validates the Seven Theses on the Brazilian Rural World, demonstrating a structural shift from land-expansion-based growth to a model driven by technological intensification and capital accumulation in the 21st century. Ultimately, the research concludes that specific institutional reforms fostered Schumpeterian creative destruction, establishing a new, technologically intensive capitalist agriculture that defined the state’s economic trajectory.  

Keywords: Agricultural Production; Extractive Institutions; Inclusive Institutions; Land Market; Rural Enterprise

References