Inequality and poverty have walked hand in hand in Brazil for decades and even centuries, the result of non-inclusive growth models and regressive social policies. In the second half of the 20th century, Brazil has been one of the most unequal countries in the world, with economists coining expressions such as “Belindia – a society consisting of a tiny Belgium of prosperity in a sea of Indian poverty”. For years, the poorest 60 % of the population had only 4 % of the wealth, while the richest 20 % held 58 % of the pie.
Ten years ago this month, President Lula launched the innovative Bolsa Família Program (BF), scaling up and coordinating scattered existing initiatives under a powerfully simple concept: trusting poor families with small cash transfers in return for keeping their children in school and attending preventive health care visits.
BF was met with considerable skepticism. After all, Brazil had traditionally been a big spender in the social sectors, with 22 % of GDP spent on education, health, social protection and social security. One of the images used by academics was that throwing money out of a helicopter would be just as efficient to reach the poor, given Brazil’s frustration with the lack of results. How could BF, with about half a percent of GDP, change this bleak scenario?
Ten years after BF has been key to help Brazil more than halve its extreme poverty – from 9.7 to 4.3 % of the population. Most impressively, and in contrast to other countries, income inequality also fell markedly, to a Gini coefficient of 0.527 an impressive 15 % decrease. BF now reaches nearly 14 million households – 50 million people or around 1/4 of the population, and is widely seen as a global success story, a reference point for social policy around the world.
Equally important, qualitative studies have highlighted how the regular cash transfers from the program have helped promote the dignity and autonomy of the poor. This is particularly true for women, who account for over 90% of the beneficiaries.
Besides this immediate poverty impact, a second key goal of BF was to break the transmission of poverty from parents to children by increasing the opportunities for the new generation through better education and health outcomes. Assessing progress on this goal requires longer term monitoring, but the results up to now have been very promising. BF has increased school attendance and grade progression. For instance, the chances of a 15 year old girl being in school increased by 21%. Children and families are better prepared to study and seize opportunities with more prenatal care visits, immunization coverage and reduced child mortality. Poverty invariably casts a long shadow on the next generation, but these results leave no doubt that BF has improved the prospects for generations of children. At the same time, fears about unintended consequences such as possible reduced work incentives have not materialized. Indeed, increased labor income has been another critical player in the reduction of poverty and inequality in Brazil during this period.
The Cadastro Único is the essential tool that allowed BF to achieve these landmark successes. It provides the basis for targeting BF benefits, but also links to numerous other social programs and services. It is hence not only the backbone that ensures effective administration of the BF, but also a tool for coordinating social policy and facilitating rapid scale-up of additional efforts such as the recent Brasil Carinhoso program. Efficient administration and good targeting has enabled BF to achieve its success at a very low cost (around 0.6% of GDP), and build the base for ambitious programs such as Brasil sem Miséria and the Busca Ativa effort, to include those not yet reached.
Brazil’s experience is showing the way for the rest of the world. Despite its relatively short life, BF has helped stimulate an expansion of conditional cash transfer programs in Latin America and around the world – such programs are now in more than 40 countries. Last year alone, more than 120 delegations visited Brazil to learn about BF. The World Bank has been a partner to BF from the very beginning; we are learning from it and helping to disseminate it. Our new global goals of eradicating extreme poverty by 2030 and boosting shared prosperity draw from Brazil’s experience. Another concrete step is the development of the Brazil Learning Initiative for a World without Poverty (WWP), recently launched in Brasília in partnership with the Ministry of Social Development, Ipea and UNDP’s International Policy Center. The Initiative will help support continued innovation and learning from Brazil’s social policy experience.
The ultimate goal of any welfare program is for its success to render it redundant. Brazil is well placed to sustain the achievements over the last decade and is close to reaching the amazing feat of eradicating poverty and hunger for all Brazilians, a true reason to celebrate.