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The Politics behind Conditional Cash Transfers, the Brazilian Case

Conditional Cash Transfer programmes have become a popular way for governments to address mass poverty and by 2008 there were over 110 million families in 45 countries who were beneficiaries of such programmes. Essentially, a conditional cash transfer is a regular cash transfer that is made on condition that the family commits to making sure that their children go to school, get vaccinated or attend nutritional programmes amongst other things.

Anthony Hall, the LSE professor in Social Policy who has extensively studied conditional cash transfers and consulted institutions about them, wrote a piece in 2012 called ‘The last shall be first: political dimensions of conditional cash transfers in Brazil’. Because Hall is renowned for his expertise in the Brazilian territory, I was convinced that this report would be a good read to get a general summary of their biggest conditional cash transfer programme, Bolsa Familia.

As a matter of fact, Brazil’s Bolsa Familia is the world’s largest conditional cash transfer programme. Hall says that it currently reaches 13 million families, which amounts to approximately 50 million individuals, or. a quarter of Brazil’s population. This programme was launched by PT’s (Workers’ Party) Lula da Silva in 2003, as a combined product of already existing income transfer programmes such as Bolsa Escola (Education Stipend),Bolsa Alimentação (Food Stipend), PETI anti-child poverty scheme and Auxilio Gas (cooking gas subsidy). Initially, it was criticised for being inefficient due to a disorganised database which did not screen thoroughly those who received double payments for example.

However, by 2004 Bolsa Familia gained credibility so much that the World Bank gave funding worth $772 million throughout 2004 and 2010 and the Inter-American Development Bank donated an additional $1 billion back in 2004. Essentially Bolsa Familia was designed to serve poor families with children. For this, those who qualified for the programme were divided into ‘very poor’ and ‘poor’ families. Those who earn a monthly income of up to R$140 (US$44) were considered ‘very poor’ and others who earn between R$140 and R$280 (US$88) were categorised as ‘poor’. The ‘very poor’ families received a monthly rate of R$70 (US$22) regardless of whether they had children or not. In addition, both categories of families received for every child aged 5-15, R$32 (US$12) for a maximum of 5 children and R$38 for each child of age 16 to 17 for a maximum of two children.

These payments are made directly to the mother figure in each family who will have opened a bank account at the Caixa Economica Federal (Federal Economic Bank) and hold a Bolsa Familia debit card to withdraw the money. Certainly the payments were not made if a family was not able to show proof of regular school attendance, children’s vaccination, health clinic visits and participation in nutrition or training programmes. These activities are also monitored by the Social Accountability unit at each municipality, together with locally organised committees and the involved schools and clinics. Moreover, a beneficiaries survey which takes place every two years has been implemented as well and for example, in 2009 over 450,000 beneficiaries were ejected because they no longer classified or had failed to re-register.

Judging from the clear operational structure that has been set up around Bolsa Familia, it is no surprise that by the end of 2006 the original target was met which was to reach 11.1 million families, 44 million people. As a result Bolsa Familia is considered the most important poverty alleviation programme in Brazil, having said that, this popularity comes with subtle but powerful political implications.

Hall argues that the political dimensions of Bolsa Familia, just as for most other conditional cash transfer programmes around the world, are electoral and structural. In Lula’s first term his political party was much supported by the voters in the more wealthy southern regions, However, by 2006, when he was re-elected as President he had gained the support of up to 85% of voters in the north and north eastern regions of the country. Needless to say, as a consequence, the political campaign of his successor, Dilma Rousseff, was very much focused on her commitment to investing further in Bolsa Familia.

Conditional cash transfers are popular amongst policy makers because they are highly effective, relatively inexpensive and politically attractive. These programmes are also implemented at the executive level and do not require changes in legislation. The criticism of conditional cash transfers, however, is that it creates a culture of dependence, where people heavily rely on this social safety net and arguably get discouraged from looking for formal employment, since they would risk disqualification from the programme that. Hence, the structural dimension of this social policy is that, despite the fact that income transfers are not a long term solution to getting people out of poverty, policy makers become hesitant to invest in, for example, the improvement of the education and healthcare systems, which would not benefit people immediately the way conditional cash transfers do.

In all, Hall claims that there is potentially a high political cost in making conditional cash transfers a nation’s number one social policy. Dilma is now working on an extension of Bolsa Familiacalled Brasil sem Miseria (Brazil without Misery) which is due to have a component of additional training programmes and microcredit, in order to facilitate entrance to formal employment. It will be interesting to observe how much of this will take place, considering the recent protests against the current Brazilian government. Considering that Brazil is one of the few Latin American countries where microfinance remains to be a marginal service for the poor, there is a strong argument for the government to begin investing more on programmes that helpBolsa Familia beneficiaries to engage in remuneration generating activities so that the risk of dependence is minimised.

Ayako Iba


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