Bolsa Família

Bolsa Família, roughly translated as "Family Stipend" or "Family Grant" in English, is a part of the Brazilian governmental welfare program Fome Zero. Bolsa Família provides financial aid to poor and indigent Brazilian families on condition that the children must attend school and be vaccinated. The program attempts to both reduce short-term poverty by direct cash transfers and fight long-term poverty by increasing human capital among the poor through conditional cash transfers. [http://www.dji.com.br/decretos/2004-005209/2004-005209.htm Decree nº 5.209, de 17 de setembro de 2004 - Regulates a Law-010.836-2004 - Bolsa Família Program.] ]

The well known classical liberal magazine The Economist mentioned Bolsa Familia as "An anti-poverty scheme invented in Latin America" (which) "is winning converts worldwide." [http://www.economist.com/world/la/displaystory.cfm?story_id=10650663 "Happy families: An anti-poverty scheme invented in Latin America is winning converts worldwide." The Americas: Brazil in "The Economist" print edition, MACEIÓ: Feb 7th 2008] ]

The program is a centerpiece of President Luiz Inácio Lula da Silva's social policy, and is reputed to have played a role in his victory in the 2006 national elections [ [http://www.washingtonpost.com/wp-dyn/content/article/2006/10/28/AR2006102800823.html?nav=rss_world/southamerica Cash Aid Program Bolsters Lula's Reelection Prospects - washingtonpost.com ] ] . Bolsa Familia is currently the largest conditional cash transfer program in the world, though the Mexican program Oportunidades was the first nation-wide program of this kind [http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BRAZILEXTN/0,,contentMDK:21444879~isCURL:Y~pagePK:141137~piPK:141127~theSitePK:322341,00.html"Bolsa Família: Changing the Lives of Millions in Brazil, Ther World Bank, Aug/22/2007] ] .

The Bolsa Familia program has been mentioned as one the main factors contributing to the reduction of poverty in Brazil, which fell 27,7% during Lula's first term in government [http://txt.estado.com.br/editorias/2007/09/20/eco-1.93.4.20070920.40.1.xml BRANDÃO JR., Nilson Brandão e ARAGÃO, Marianna. "Miséria no Brasil cai 27,7% no 1º mandato de Lula", Economia e Negócios, O Estado de S. Paulo, 20/09/2007, p. B14] ] . Recently the Center of Political Studies of the Getulio Vargas Foundation has published a study showing that there was a sharp reduction in them number of people in poverty in Brazil between 2003 and 2005. [http://noticias.terra.com.br/brasil/interna/0,,OI1151870-EI306,00.html "FGV divulga estudo mostrando redução da miséria", Reuters, 21/09/2006] ]

::The main contributing factors for the reduction in poverty in Brazil have been an improvement in the job market, the Bolsa Familia and real gains on the minimum wage [http://txt.estado.com.br/editorias/2007/09/20/eco-1.93.4.20070920.40.1.xml BRANDÃO JR., Nilson Brandão e ARAGÃO, Marianna. "Miséria no Brasil cai 27,7% no 1º mandato de Lula", Economia e Negócios, O Estado de S. Paulo, 20/09/2007, p. B14] ] .

History

Bolsa Escola, a predecessor which was conditional only on school attendance, was pioneered in Brasilia by then-governor Cristovam Buarque. Not long after, other municipalities and states adopted similar programs. President Fernando Henrique Cardoso later federalized the program. In 2003, Lula formed Bolsa Família by combining Bolsa Escola with Bolsa Alimentação and Cartão Alimentação (all part of Lula's Fome Zero anti-hunger program) and Auxílio Gas (a transfer to compensate for the end of federal gas subsidies). This also meant the creation of a new Ministry - the Ministério do Desenvolvimento Social e Combate à Fome (Ministry of Social Development). This merge reduced administrative costs and bureaucratic complexity for both the families involved and the administration of the program.

Benefit

Bolsa Família currently gives a monthly stipend of 18 reais (about $10 USD) per child attending school, to a maximum of three children, to all families with per-capita income below 120 reais a month (poverty). Furthermore, to families whose per-capita income is less than sixty reais per month (extreme poverty), the program gives an additional flat sum of 58 reais per month. This is called the Basic Benefit, and has no conditionalities [ [http://www.mds.gov.br/bolsafamilia/o_programa_bolsa_familia/beneficios-e-contrapartidas MDS website] ] [http://www.dji.com.br/decretos/2004-005209/2004-005209.htm Decree nº 5.209, de 17 de setembro de 2004 - Regulates a Law-010.836-2004 - Bolsa Família Program.] ]

This money is given preferentially to a female head of household, through so-called "Citizen Cards" which are mailed to the family. This card operates like a debit card and is issued by the Caixa Econômica Federal, a government-owned savings bank (the second largest bank in the country). The money can be withdrawn in over 14,000 Caixa locations. This practice helps to reduce corruption, long a problem in Brazil, and helps to dissociate the receipt of money from individual politicians or political parties. The names of every person enlisted in the program and the amount given to them can be found online at the Portal da Transparência, the program's website.

Cost and Coverage

In 2006, Bolsa Familia is estimated to cost about 0.5% of Brazilian GDP and about 2.5% of total government expenditure. It will cover about 11.2 million families, or about 44 million Brazilians [ [http://www.mfdr.org/sourcebook/6-1Brazil-BolsaFamilia.pdf MfDR Sourcebook ] ] .

The Bolsa Família was criticized by political opponents of President Lula for allegedly using the revenues of the CPMF tax (which was originally created under the pretext of financing the public health system during the Fernando Henrique Cardoso administration, but never actually did; the CPMF tax expired in December 2007, and was not renewed) for political and electoral purposes [ [http://ouvidoria.petrobras.com.br/PaginaDinamica.asp?Grupo=254&Publicacao=156&APRES=PUBL "The Economist", Novo Pensamento sobre um Problema Antigo] pt icon] , to the detriment of the public health system that currently faces enormous difficulties. [ [http://www.agenciabrasil.gov.br/noticias/2007/09/04/materia.2007-09-04.5687737617/view Para ministro, fim da CPMF poderia acabar com o Bolsa Família, Agência Brasil] pt icon]

Perception

The reaction from multilateral institutions to Bolsa Família has generally been enthusiastic. During a trip to Brazil in 2005, the former president of the World Bank, Paul Wolfowitz said, "Bolsa Familia has already become a highly praised model of effective social policy. Countries around the world are drawing lessons from Brazil’s experience and are trying to produce the same results for their own people." [ [http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20702063~pagePK:64257043~piPK:437376~theSitePK:4607,00.html News & Broadcast - Brazil’s Bolsa Familia Program Celebrates Progress in Lifting Families out of Poverty ] ]

Resistance

Certain sectors of the Brazilian society, both among the conservatives and the progressives, as well as the Catholic Church, oppose the concept of money transfers to the poor:

::"This concept has been always controversial in Brazil. In others countries it is not this way, but in Brazil there has always been resistance. When I was in faculty they (the opponents to the concept of money transfers) used to say: 'the first thing the poor will to with the money is to get themselves drunk'. Later on, it was no longer getting drunk that people talked about; they would say he money transferred would be used by the poor to buy a battery radio. They assumed that people with less education would not use their money wisely." [http://www.estadao.com.br/suplementos/not_sup40930,0.htm DORIA, Pedro. "O tamanho do Brasil pobre", Aliás, in O Estado de S. Paulo, 26/08/2007] ]

::Q. Does that resistance make sense? A: No. In the 1980s (São Paulo State) Governor Franco Montoro had created a money transfer program to benefit families which were receiving their sons back home, coming out of "FEBEM" (the Brazilian punitive institution for minors). As it was very, very little money, families would get together to do house-raising, each month on somebody's house. Or families would save togeteher, for months, to be able to buy a popcorn wagon for a youth who now had to start working. At the same time other programs, which provided food, failed because they did not take into account regional habits. Here in São Paulo, for instance, the Federal Government distributed tons of black beans, which are only eaten in Rio. People threw it away. [http://www.estadao.com.br/suplementos/not_sup40930,0.htm DORIA, Pedro. "O tamanho do Brasil pobre", Aliás, in O Estado de S. Paulo, 26/08/2007] ]

The Bolsa Família Program is far from being universally accepted by the Brazilian society. Among the various criticisms it receives, one of the most recurrent is the belief that it could discourage the search for employment. The Catholic Church, through its powerful National Conference of Bishops of Brazil (CNBB), maintains that "the program vitiates" and leads its beneficiaries to an "accommodation". This is not what the World Bank thinks. Having conducted several surveys on the subject the World Bank came to the conclusion that the program does not discourage work, nor social ascension. On the contrary, says Bénédicte de la Brière, responsible for the program monitoring at the institution:

::"Adult work is not impacted by income transfers. In some cases adults will even work harder because having this safety net encourages them to assume greater risks in their activities"' [http://terramagazine.terra.com.br/interna/0,,OI1906421-EI6578,00.html BRAMATTI, Daniel. "Banco Mundial vê Bolsa Família como modelo.", São Paulo: Política, Terra Magazine, Sep. 17, 2007, 08h18] ]

Many Brazilians also recognize that the Bolsa Família has a potential for reducing absolute poverty and to reduce inter-generational transmission of poverty. For one example, among many, Renata de Camargo Nacimento (heir to the powerful, Brazilian multi-billionaire Camargo Correa Group), when asked, in an interview, if she agreed that Bolsa Família is just a form of charity, answered as follows: "I travel a lot around Brazil and saw many places where the average monthly income is BRL 50 (approximately US$ 26.32). In these places the Bolsa Familia comes in and adds an extra BRL 58. It makes all the difference in the world and adds a lot for the needy population. What is more important is that it promotes a virtuous circle. If there is more money in circulation, the local market heats up, the purchasing power is increased and the effects spread throughout the whole economy. But only to give money is not enough.(...)" HAAG, Carlos. "O Discreto Charme Da Solidariedade", an Interview with Renata de Camargo Nascimento, São Paulo: Private Brokers, Year IV, Nr. 16, SEPT/OCT/NOV 2007, P. 41

Surveys conducted by the Federal Government among Bolsa Família's beneficiaries indicate that the money is spent, in order of priority, on food, school supplies, clothing and shoes. [http://veja.abril.com.br/idade/exclusivo/bolsa_familia/08.html "Bolsa Família, Perguntas e Respostas, Veja Online] ] A study conducted by The Federal University of Pernambuco, using sophisticated statistical methods, inferred that 87% of the money is used, by families living in rural areas, to buy food. [http://www.bnb.gov.br/content/aplicacao/Eventos/ForumBNB2007/docs/impactos-do-programa.pdf DUARTE, Gisléia Benini, et al. "Impactos do Programa Bolsa Família Sobre Os gastos Com Alimentos De Famílias Rurais.] ]

Effects

The program has clearly contributed to Brazil's recent improvements in its fight against poverty, according research promoted by some universities and the Brazilian Institute of Geography and Statistics (IBGE). An ex ante econometric evaluation of Bolsa Escola did find significant effects on both school attendance rates and the number of children involved in child labor [ [http://papers.ssrn.com/sol3/papers.cfm?abstract_id=358407 SSRN-Ex-ante Evaluation of Conditional Cash Transfer Programs: The Case of Bolsa Escola by Francois Bourguignon, Francisco Ferreira, Phillippe Leite ] ] [http://go.worldbank.org/L7RZYL07J0 RAWLINGS, Laura B. e RUBIO, Gloria M. "Evaluating the Impact of Conditional Cash Transfer Programs - Lessons from Latin America, Volume 1, World Bank Policy Research Working Paper 3119, August 2003", The World Bank, 2003.] .

The World Bank, which created on June 2005 a "Bolsa Família Project" [http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000160016_20040610095010"Brazil - Bolsa Familia Project", The World Bank] ] to assist the Brazilian government in managing the Bolsa Família Program, declares that "Although the program is relatively young, some results are already apparent, including: (...) contributions to improved education outcomes, and impacts on children’s growth, food consumption, and diet quality" [http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20702063~pagePK:64257043~piPK:437376~theSitePK:4607,00.html "Brazil’s Bolsa Familia Program Celebrates Progress in Lifting Families out of Poverty", News & Broadcast, The World Bank, Brasilia, Brazil, December 19, 2005] ] .

A study by the UNDP Poverty Centre found that over 80% of the Bolsa Familia benefits go to families in poverty (making under half the minimum wage per capita), thus most of the benefits go to the poor. BF was also found to have been responsible for about 20% of the drop in inequality in Brazil since 2001, which is welcome in one of the most unequal countries on the planet [ [http://www.undp-povertycentre.org/newsletters/WorkingPaper21.pdf untitled ] ] .Research promoted by the World Bank shows a significant reduction in child labor exploration among children benefited by the Bolsa Família program. YAP, Yoon-Tien, Guilherme Sedlacek and Peter Orazem. 2001. "Limiting Child Labor Through Behavior-Based Income Transfers: An Experimental Evaluation of the PETI Program in Rural Brazil". World Bank, Washington, DC ]

One positive effect of the program which is not immediately apparent is that it makes a significant impact on the ability of the poorest families to eat. Children in public school receive one free meal a day -- two in the poorest areas -- and so less of their family's limited income is needed to pay for food. In a survey of Bolsa Familia recipients, 82.4% reported eating better; additionally, it was reported to increase the incomes of the poorer families by about 25% [ [http://info.worldbank.org/etools/icct06/DOCS/English/Day1/Mutzig_CCTs%20in%20MIC_Brazil.pdf Microsoft PowerPoint - Mutzig_CCTs in MIC_Brazil_06-26_III.b.ppt ] ] .

See also

* Fome Zero
* Poverty
* Child Labor

References

External links

* [http://www.economist.com/world/la/displaystory.cfm?story_id=10650663 "Happy families: An anti-poverty scheme invented in Latin America is winning converts worldwide." The Americas: Brazil in "The Economist" print edition, MACEIÓ: Feb 7th 2008]
* [http://www.mds.gov.br/programas/transferencia-de-renda/programa-bolsa-familia Ministry of Social Development website]
* [http://www.mfdr.org/sourcebook/6-1Brazil-BolsaFamilia.pdf World Bank review of Bolsa Família]
* [http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BRAZILEXTN/0,,contentMDK:21444879~isCURL:Y~pagePK:141137~piPK:141127~theSitePK:322341,00.html"Bolsa Família: Changing the Lives of Millions in Brazil, Ther World Bank, Aug/22/2007] [http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BRAZILEXTN/0,,contentMDK:21444879~isCURL:Y~pagePK:141137~piPK:141127~theSitePK:322341,00.html"Bolsa Família: Changing the Lives of Millions in Brazil, Ther World Bank, Aug/22/2007]
* [http://www.economist.com/cities/displaystory.cfm?story_id=4408187 Economist article on Bolsa Família]
* [http://info.worldbank.org/etools/ICCT06/DOCS/English/Day5/Emil_Romulo_Monitoring%20PerformanceEN.pdf MDS monitoring of Bolsa Familia]
* [http://www.iadb.org/news/articledetail.cfm?language=English&artid=1334&artType=PR Inter-American Development Bank press release regarding Bolsa Familia]
* [http://ultimosegundo.ig.com.br/materias/educacao/2027001-2027500/2027424/2027424_1.xml Article on Bolsa Familia and increases in class attendance]
* [http://info.worldbank.org/etools/icct06/DOCS/English/Day1/Mutzig_CCTs%20in%20MIC_Brazil.pdf MUTZIG, Jean Marc. "The Bolsa Família Grants Program", Ministry of Social Development and Hunger Eradication, Brazil. Istanbul, Turkey: Third International Conference on Conditional Cash Transfers, June 26, 2006 (Powerpoint summary of BFP)]
* [http://pt.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia#.7B.7BLiga.C3.A7.C3.B5es_externas.7D.7D Bolsa Família]

Bibliography

* [http://adlib.iss.nl/adlib/uploads/wp/wp390.pdf BRITTO, Tatiana Feitosa de. "Conditional Cash Transfers: Why Have They Become So Prominent in Recent Poverty Reduction Strategies in Latin America." Institute of Social Studies 390(2004)]
* [http://go.worldbank.org/L7RZYL07J0 RAWLINGS, Laura B. e RUBIO, Gloria M. "Evaluating the Impact of Conditional Cash Transfer Programs - Lessons from Latin America, Volume 1, World Bank Policy Research Working Paper 3119, August 2003", The World Bank, 2003.]

* YAP, Yoon-Tien, Guilherme Sedlacek and Peter Orazem. 2001. "Limiting Child Labor Through Behavior-Based Income Transfers: An Experimental Evaluation of the PETI Program in Rural Brazil". World Bank, Washington, DC

* WORLD BANK. 2001a. Brazil: An Assessment of the Bolsa Escola Programs. Human Development Department, Latin America and Caribbean Region, The World Bank, Washington, DC.