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Bolsa Famlia: Brazils Quiet Revolution

Deborah Wetzel
Valor Econm ico
November 4, 2013

MEDIA CONTACTS

In Brasilia
Paula Teklenburg
Tel : +55 (61) 3329-1059
pteklenburg@worldbank.org

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 Famlia 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 Brazils
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 nico 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 Misria and the Busca Ativa effort, to include those not yet reached.

Brazils 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 Brazils
experience. Another concrete step is the development of the Brazil Learning Initiative for a World without Poverty
(WWP), recently launched in Braslia in partnership with the Ministry of Social Development, Ipea and UNDPs
International Policy Center. The Initiative will help support continued innovation and learning from Brazils 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.

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