MONEY FOR (NEXT TO) NOTHING
As useful as Lula’s contrapartidas were in boosting Bolsa Família’s popularity, two other innovations would prove almost as important. First, for all its ambitions, Bolsa Família was, and remains, cheap—radically so, compared with most other social welfare programs in Brazil and elsewhere. Today, more than a decade after its launch, Bolsa Família reaches about 14 million families, which translates to about 55 million Brazilians—an enormous number. Yet because Lula and his advisers recognized that it takes only a small sum of money to make a big difference in a poor family’s life, the individual payments (which vary according to income and family size) are tiny: the average family gets just $65 a month, and benefits top out at $200.
As a result, “the amount spent on Bolsa Família is nothing,” says Yoshiaki Nakano, the director of the São Paulo School of Economics. That’s an exaggeration, but not a big one. The fact is that one of the world’s most ambitious antipoverty programs currently costs Brazilian taxpayers less than half a percent of the country’s $2.3 trillion GDP, far less than the government spends on, say, pensions (a much more regressive support mechanism). Although precise international comparisons are hard to make, the evidence suggests that Bolsa Família is one of the cheapest antipoverty programs anywhere. Indeed, a 2011 study by the British government found that thanks in part to their minimal administrative expenses, cash-transfer programs such as Bolsa Família cost 30 percent less per person than more traditional aid programs.
The program was also structured
in such a way that it would ultimately benefit all Brazilians, not just those at the bottom. As Lula explained when
he first introduced it, “When millions can go to the supermarket to buy milk, to buy bread, the economy will work better. The miserable will become consumers.” By giving people money that they could spend however they wanted, Lula created what Lena Lavinas, a welfare economist at the Federal University of Rio de Janeiro, has called “a pro-market approach to combating poverty.” Indeed, no less an authority than Jorge Castañeda, a former conservative foreign minister of Mexico turned columnist and scourge of the Latin American left, has called Bolsa Família an “innovative welfare program” that is as “neoliberal . . . as one can get.”
Although the price tag for Bolsa Família may be small, its impact has proved enormous. Not only has it reached more than a quarter of the overall population (and 85 percent of the poor), but the payments, tiny though they are, have doubled the incomes of Brazil’s most destitute families. In its first three years, Bolsa Família cut extreme poverty by 15 percent, and by 2014, the percentage of Brazilians living in indigence had been slashed to less than three percent—a level the World Bank considers equivalent to eradication. At the same time, Bolsa Família has helped lift a total of 36 million people out of general poverty, producing what Matias Spektor, a political scientist and columnist for Brazil’s biggest newspaper, Folha de S.Paulo, described to me as “the single largest ten-year change to a country’s class structure since Japan after World War II.”
As for inequality, recent studies credit Bolsa Família with having helped reduce the country’s overall income gap by a third and rank the program as the second most important contributor to this change after general economic growth. According to Tereza Campello, the country’s minister of social development, the income of the poorest
20 percent of Brazilians rose by 6.2 percent between 2002 and 2013, while that of the country’s richest 20 percent grew by only 2.6 percent. (That stands in sharp contrast to the United States, where during the same period, the income of the richest ten percent rose by 2.6 percent, while that of the poorest ten percent shrank by 8.6 percent.) Although the Brazilian government has implemented a number of other important social support programs, including big hikes to the minimum wage, and although a growing economy helped matters, most experts agree that Bolsa Família deserves a huge amount of the credit for the overall improvement in the lives of the country’s poor. Bolsa Família has also proved an important cushion as Brazil’s growth has slowed in recent years. The country’s overall economy may be hurting today, but thanks to the buffer provided by Bolsa Família, the masses are not—or at least not compared to the way they suffered during the country’s many past crises.