The impact of the Bolsa Familia Programme on the development of

The impact of the Bolsa Familia Programme on the development of the Brazilian Northeast region Luiz Marcelo Videro Vieira Santos University of London Government of Brazil

Overview • Theoretical Framework – Poverty and Inequality – Development: capabilities approach

• Social policies and Conditional Cash transfer • Case Study – Bolsa Familia Programme – Evidence

Poverty • Absence of economic resources (Barrientos, Hulme & Shepherd 2005) – Transitory poverty: Lack of asset returns – Structural poverty: Lack of assets

• Lack of empowerment (Narayan in Beall & Piron 2005) – Multidimensional problem associated with risk and vulnerability related to absence of political voice

• Lack of access to government infrastructure and services • Lack of opportunities do develop capabilities

Poverty • Economic participation – consuming goods and services and selling their work force

• Political influence – Empowerment and political voice

• Social inclusion – housing, health, education, sanitation, etc

Inequality • Unfair / unbalanced distribution of the wealth. Unequal appropriation of the wealth of a nation • Unbalanced opportunities for the citizens to fully develop their capabilities

Capabilities approach • Development as Freedom (Amartya Sen) – Freedom is condition, means and end of development – To do things: study, work, rest, to have fun, etc – From suffering things: any kind of coercion or violence that affect their rights of opinion, political participation, security, human and civil rights, etc

• Capabilities approach (Sen and Nussbaum) – Use capacity of doing and being (Capabilities) – To acquire valid doings and beings (Functionings)

Overview • Theoretical Framework – Poverty and Inequality – Development: capabilities approach

• Social policies and Conditional Cash transfer • Case Study – Bolsa Familia Programme – Evidence

Social Protection System (Welfare State) Objectives (Bastagli 2008) • Insurance against risks – Old age – Unemployment

• Protection against shocks – Drought – Flood – SAP

• Assistance and protection to vulnerable groups – Disabled – Children

• Redistribution • Promotion of rights and citizenship

Social Protection System (Welfare State) Policy Instruments • Transfers in-kind – School feeding – Price subsidies (food, energy, housing) – Service fee waivers (school, health care

• Tax/Fiscal tools – Deductions – Reliefs

• Public works programmes – Low paid, public employment, labour intensive, infrastructure

• Social funds – Emergency / temporary resources to poor communities

• Cash transfers (the most common in developed countries) – Family allowance – Unemployment benefit

Cash Transfers: Types • Universal – flat-rate to entire population

• Categorical – particular vulnerable group (elderly, war veterans)

• Means-tested – Based on income, consumption, assets, etc

• Contributory – Protection against risk for workers and their families

• Contingency-based • Conditional (CCT) – Depends on beneficiary compliance with a a pre-defined behaviour

Cash Transfers: Forms • Basic income – Regularly paid independently of situation

• Social dividend – Payment made once in a life

• Minimum income – Complement low incomes up to a poverty threshold

• Negative income tax – Universal – Benefits / tax payment vary inversely with income

• Conditional Cash Transfers – Requires to follow pre-determined behavior – Targeted

Conditional Cash Transfers • Growing popularity – >100 programmes implemented

• Reasons – Political feasibility (De Janvry, Finan & Saudoulet 2006) – Low cost (Morley & Coady 2003) – Subjected to external evaluations (Rawlings 2004)

• Positive results – Health, under-nourishment, inequality, gender issues, etc

Overview • Theoretical Framework – Poverty and Inequality – Development: capabilities approach

• Social policies and Conditional Cash transfer • Case Study – Bolsa Familia Programme – Evidence

Bolsa Familia Programme • Brazil (2003) – Poverty • 28% pop (44 M) = poor (1USD/day) • 7.4% pop (13.8 M) = extreme poverty

– Inequality • 1% richest = 50% poorest share of income

Bolsa Familia Programme • • • •

Launched in 2003 Attend 12.4M families (49.5M people) Budget: 7.6 Billion USD 2 main objectives: – Reduce current poverty and inequality – Avoid future poverty

• Conditionalities – Keep children at school (break intergenerational poverty) – Attend health centres: vaccines and exams

• Benefit (average) – 52.50 USD per household / month

Bolsa Familia Programme States Alagoas Bahia Ceará Maranhão Paraíba Pernambuco Piauí Rio Grande do Norte Sergipe Northeast

BFP04

Public Budget 2003 1.875.104.870 6.644.491.750 4.328.968.240 2.211.151.180 2.669.454.820 6.544.227.630 1.565.508.180

BFP 2004 137.724.223 541.949.496 392.696.286 264.708.557 194.184.458 145.552.629 94.239.719

2.365.597.750 1.465.023.760 29.669.528.180

112.379.849 34.160.467 1.917.595.684

PB03 7% 8% 9% 12% 7% 2% 6% 5% 2% 6%

Year

2003

2004

2005

2006

2007

2008

2009

2010

Total per year

0.57

3.79

5.69

8.23

9.95

10.85

13.20

13.68

Budget Increase

6.649122 1.501319 1.445557 1.210178 1.089910 1.216707 1.036363 807 261 181 25 298 794 636

Inequality

Pro-Poor Growth 20,00 Pro-Poor Grow th Rate 15,00

10,00

5,00

0,00 1995-1996

1996-1997

1997-1998

1998-1999

1999-2001

2001-2002

2002-2003

-5,00

-10,00

-15,00 Grow th Rate

Pro-Poor Grow th Rate

Gain / Loss

2003-2004

Real Variation GDP x Industrial Production x Retail Sales

Retail Sales

References • •

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BARRIENTOS, A., HULME, D. & SHEPHERD, A. 2005. Can social protection force tackle chronic poverty? European Journal of Development Research, 17(1) 8-23. BASTAGLI, F. 2008. The Design, Implementation and Impact of Conditional Cash Transfers Targeted on the Poor: an Evaluation of Brazil’s Bolsa Família. PhD Thesis submitted to the London School of Economic and Political Science, London, September 2008. BEALL, J. & PIRON, L.H. 2005. DFID Social Exclusion Review. London: Overseas Development Institute. BESLEY, T. & BURGESS, R. 2003. Halving global poverty. Journal of Economic Perspectives 17(3). DE JANVRY, A, FINAN, F, and SADOULET, E. 2006. Evaluating Brazil’s Bolsa Escola Program: Impact on Schooling and Municipal Roles. Mimeo: Berkeley, CA: University of Berkeley. MORLEY, S., and COADY, D. 2003. From social assistance to social development. Targeted education subsidies in developing countries. Washington, DC: International Food Policy Research Institute (IFPRI). RAWLINGS, L. 2004. A new approach to social assistance: Latin America's experience with conditional cash transfer programmes. Social Protection Discussion Paper N. 0416 Washington, DC: The World Bank.