Brazil Final Paper

For the final paper incorporating the research previously posted on this blog, please see here.

A Final Note on Conditional Cash Transfer Programs in Latin America

For the most up-to-date published information on the coverage of Bolsa Familia see the table below.  The table also provides an interesting comparison of the size of Bolsa Familia in relation to other Latin American nations.

This tables is from ECLAC’s 2010 Social Panorama of Latin America.  For a full text version of this document, see http://www.eclac.org/publicaciones/xml/1/41801/PSI2010full-text.pdf.

Draibe: Bolsa-Escola y Bolsa Família

• Bolsa Família differentiated itself from other social programs as it became a central program of the administration and essentially the only national strategy to reduce poverty (1)
• Earlier programs were based on the provision of services, not cash benefits; they were fragmented, centralized, inefficiency and had a large degree of clientelism   (2)
• Constitution of 1988 established the social right (new politics of social assistance) – places importance on social security (not the insurance program); goal of universal and equal protection and amparo of family, mothers, children, teens, and the elderly y los carentes (3)
• Bolsa Familia in comparison with other programs created significant changes in the institutional structure – it was significantly decentralized – supported in funding and personnel by states and municipalities (4)
•  Brazil was later than its neighbors in implementing a poverty reduction policy – from 1980 t0 1994, the poor were lacking essentially any and all protection – with the exception of the Cruzado Plan (1986-1987), private sector reforms and stabilization plans were implemented without any accompaniment of compensating programs for the poor and vulnerable (5).  10 years later, however, conceptions of social justice finally took hold and allowed for a greater national focus on combating policy
• It wasn’t until Cardoso’s second term that transfer programs directed at the poor were created – main changes after 2000 with the “Fundo de Combate a Pobreza”
•  Education – motivating problem wasn’t access to schools (in the late 1990s, coverage was around 97%) but rather absenteeism,  high rates of repetition of the 4 first courses and the high drop out rates of the poor especially 12-15 year olds (8)
•  In addition to improving school performance and health, the program sought to avoid child labor – both the fight against absolute poverty ad the investment in human capital and the incentive of social mobility (9)
•  Bolsa escola: Significant increases in attendance were seen only in 5-6 year olds and 16-17 year olds; however the program excluded those without kids in school and street kids – problem in the design (13); Not improving the financial independence of families through regular work (13) – problem
•  Bolsa Familia grew out of Lula’s Fome Zero program that fought against hunger (14) – has become the principal/leading program of the government’s social policy (15); began in October 2003 (15)
•   “unificar la gestión, regularizar la ejecución y ampliar la cobertura de los programas de trasnferencia de dinero a las familias pobres” (16)
•  integrated into Fome Zero: Bolsa Escola, Bolsa Alimentacao, Auxilio Gas (inherited from previous government) and Cartao Alimentacao created earlier under Lula; in 2005 the Program for the Eradication of Child Labor was incorporated
• Decentralized organization, responsibility of municipalities as units of coordination (17)
• Two groups – extremely poor and moderately poor – chart (19)
• There does not exist a maximum time limit one can be part of the program for – can continue receiving benefits as long as the eligibility criteria and conditions are met
•  All people in former programs were registered on the Catastro Unico
• selection of families depends on meeting eligibility criteria, availability in the quotas and agreements formed between the federal government, states and municipalities
•  The program has been criticized for not fostering activities that would permit families to get out of poverty – not until april 2006 have incentives been introduced to address this – complementary programs now exist in literacy and education of youth and adults, professional capacitacion, access to microcredit, community development, etc, (21)
•  The cash transfer is paid through a magnetic card (21)
•  Information included in the registry includes characteristics of home, family, schooling levels, profession qualifications, income, and spending (more info 22)
•  Monitoring of eligibility criteria is done by periodic checks of the registry – there was an earlier period of lots of fraud – since 2005 there has been a special training to teach officials how to check for fraud; control of condition compliance is harder (obviously) 23
•  In April 2006 – information about compliance with education and health conditionalities were finally transferred to municipalities – step towards transparency (23); still little to no social participation in the program (24)
•  In May 2006 – 9,241 families, 35 million people, 78% of poor families and 100% of municipalities were covered (goal by December 11.2 families, 44.1 people)
•  Around 15% of the all families receives some sort of benefit (8.5 million homes); half of all poor families have at least one family member receiving some sort of benefit – this number reaches 70% in poorer states (26)
•  The North and Northeast regions have the highest levels of poor families covered by social program (27)
•  The resources assigned to Bolsa Familia represent about 0.5% of Brazil’s GDP and 1.6% o its total social spending; in 2006 this was 8.3 million R or $4 million USD
• About 1/5 of beneficiary families are receiving incorrect benefits from the program – bad targeting
• Other say 14% of population (all of the extremely poor) is receiving 48% of the program’s resources – good targeting (29)
•  Reduction of inequality the most notable result (31)
•  Estimated that 1/3 of the reduction in inequality between 2001 and 2004 is due to government transfers – Bolsa Familia being one of them
• Bolsa Familia alone has contributed a 14% reduction in inequality of income between families and a 27% reduction in the difference between the 20% richest and the 20% poorest (32)
•  Reduction in severity of poverty greater than reducing the number of the poor (32)
•  In 2005, less than 2% of students missed more than 15% of classes without justification (beneficiary students) (33)
•  However the age group 7-14 was the group that presented the highest attendance levels prior to the incentives, however this is the group on which BF focuses (33); thus it’s a redundant stimulus
• absenteeism more due to health issues and the condition of schools than the need to work (33)
•  “los beneficios tienden a concentrarse justametne en la faja etaria que más asiste a la escuela, desatendiendo a los jóvenes que ya abandonaron el sistema educativo” (33)
•   kids attending school but not participating in the complementary activities
•  lack of goals and incentives to increase the quality of education and the learning (desempeño de los alumnos) of students
• should establish a goal that 80% of first graders complete elementary education in 9 years, at the expected age (34)
• 6-11 month year olds have a higher probability of malnutrition (62.1%) but they are nota addressed by the program (34)
• However malnutrition in 1-3 year olds decreased 28.3% and 25.7% in 3-5 year olds
• More than 75-87% of beneficiary families spend more that 75% of the cash transfer on food; 82.4% said the alimentación improved with the cash transfer (35)
• Criticism that value of subsidy isn’t enough to convince families to not have their kids work (35)
• inconclusive results on if subsidy reduces child labor – 40% of 16 year olds working, 20% of 14 year olds working; however in lowest income group those who receive the transfer are 10% less likely to have working children (35)

Challenges for the future:

–       about to reach coverage goal: how to expend – expand to a less poor group? Or increase it to those with kids outside of ages 7-14?

–       Still gaps in quality and dissemination of information; low transparency of the program (36)

–       Will Bolsa familia become an entrance point to the basic social protection system or will it remain only a mechanism, important as it is, limited to distributing money to poor groups? (37)

–       Main problem is services –  problem isn’t whether or not the conditions are met but rather the quality of the services – need goals such as the completion of elementary education, not just going to school

• “el problema mayor está en la calidad y la adecuación de la prestación de los servicios, lo que inexorablemente requiere inversiones y programación de mediano plazo; lo que sin duda no es responsabilidad de Bolsa-Familia, pero que debe articularse con el programa, hasta porque constituye una condición para su éxito” (39)

–       Need to prevent indebted dependencies (39)

• Question not just of entrance to the program but of leaving the program – related to the jobs market and skills-building programs and access to microcredit
• Can affect expansion possibilities and adverse incentive not to work

Full text of the article here:  http://www.renda.nepp.unicamp.br/sistema/files/America_Latina/Draibe_Sonia_Bolsa_Escola_Bolsa_Familia_FLACSO_2006.pdf

More details on the functioning of Bolsa Familia

The Impact of Conditional Cash Transfers on Health Status: The Brazilian Bolsa Familia Programme

“Conditional cash transfers are becoming the standard approach to reducing poverty levels; the Brazilian Bosa Familia Grogram, in particular, is the largest programo fo this kind, and the evaluation of its impact allows for drawing some interesting conclusions, which may apply to other countires.  IN this paper, the lack of positve resutls in terms of both health status and modification of unhealthy habits is underlined.  Among idfferent causes, which are discussed, ehre thexistence of barriers on the supply side appears tas the most important limiation for obtaining better results.  The positive impact of this program on both educatino and poverty reduction however, allows for predicting improvements in health status in the long run.” –Castineria, Nunes and Rungo

This article is extraordinarily informative, outlining the functioning of the system (requirements and benefits), exploring the contrasting results in poverty and eduction vs. health, and finally discussing possible explanations.

Full text here: 

http://www.scielosp.org/scielo.php?pid=S1135-57272009000100007&script=sci_abstract&tlng=pt

My notes here: Notes on Castineria

Bolsa Familia from a human rights perspective

“The Family Grant has become one of the major programs for reducing hunger in Brazil; for a significant number of poor families, the benefits of this Program are the only possible source of income.  From the human rights perspective, however, this Program still presents a series of obstacles, which are reviewed in this essay.” –Zimmermann

Full text here:  http://bdjur.stj.gov.br/xmlui/handle/2011/22529

For my notes on the article, click here: My notes on Zimmermann

Bolsa Família

What it is: The Bolsa Família program is a system of conditional cash transfers, giving money to families if certain conditions are met such as sending kids to school or taking them to a health care facility.  Emergency assistance is also provided temporarily; the conditions seek to ensure “longer-term investments in human capital.”

Bolsa Família consolidates four social programs, reducing administrative costs and bureaucratic complexity, standardizing results and methodology,  and eliminating redundancies.  These four programs were: Bolsa Escola (Ministry of Education), Bolsa Alimentação (Ministry of Health), Cartão Alimentação ( Fome Zero), and Auxílio Gas (Ministry of Mines/Energy), promoting schooling, health care, food consumption and reduced dependence on government subsidies, respectively.

Objectives: The Bolsa Família program seeks to reduce current poverty and inequality in Brazil and to reduce future poverty and inequality through the building up of human capital.  Thus there exists a quantitative aspect – bringing more people into the safety net – and a qualitative aspect – improving the well-being of the beneficiaries.  Bolsa Família also aligns with some of the Millennium Development Goals (see pg. 68 for specifics).

Bolsa Famliia targets the family unit as the receiver of the conditional cash transfer as opposed to the individual unit.  Payments are made to the mother of the household since studies show she more than others will prioritize investments in her kids (i.e. education, health)

How it targets the poor: “By design, Bolsa Família identi- fied two target groups – the “extreme poor” (families with a per capita income of less than US$17 per month) and the “moderately poor” (families with a per capita monthly income between US$17 and $34). De- pending on the household’s composition and income, the program provides cash transfers ranging from US$5 to $33 (the average is US$24). These amounts were set, in part, to minimize the number of people who might lose benefits from previous programs. On a per capita basis, the average transfer per beneficiary represents about 6 percent of the minimum wage and 19 percent of the poverty line used by the World Bank.” (68).

Donor support: This program has support from the World Bank, the UNDP and the Inter-American Development Bank (see page 69 for SWap –sector wide approach – details: ex. intertwinement of effective implementation – widening the social net – and technical activities of monitoring and evaluation; incentives to exceed milestones, ex. loan’s financing percentage increases).  It uses a results-based approach in which technical milestones are linked to disbursements.

Challenges: a monitoring and evaluation that doesn’t just provide data but actually useful feedback on the quality of the service (coverage is one thing, quality of delivery another); reducing fraud (they are actually publishing names of beneficiaries by municipality on the Internet and setting up a hotline in which people can report suspected fraud).

Results achieved and expected:“Since its launch in December 2003, the Bolsa Família Program has grown exponentially, expanding by January 2005 to cover 26.6 million people. By the end of 2006, the program expects to cover about 44 mil- lion people. Translated as intermediate results in the results-based framework, this means:

• At least two-thirds of extremely poor families will be receiving Bolsa Família income transfers.
• At least 40 percent of total transfers will be going to families in the bottom quintile of income distribution.
• At least 80 percent of primary school–age children in extremely poor beneficiary families will be at- tending school.
• At least 95 percent of beneficiary children will have and be using health cards.” (71)

Lessons learned:

• It is beneficial for borrowers to own, lead and sustain their commitment to the process
• Conditional cash transfers are operationally feasible and political acceptable (as they are not seen as just hand-outs due to the fact that they are not unrestricted cash-subsidies)
• Human capital conditionalities can help the poor “grow out of poverty

– for more see pages 71 and 72

Applicability: Bolsa Família is the largest conditional cash-transfer program in the developing world.  Thus, its challenges and solutions with respect to beneficiary selection, monitoring and evaluation, and quality control, as well as the World Bank’s lending mechanism designed to support the Bolsa Família program should be applicable to other countries.  Of course, this is not a one size fits all model, but clearly need to be adapted, taking into account new and different circumstances (“the (potential) success of the project is in many respects a function of the donor’s capacity to adapt to the specific needs of that program.” (73))

Source: http://www.mfdr.org/sourcebook/6-1brazil-bolsafamilia.pdf