Bolsa Família: Changing the Lives of Millions in Brazil

August 22, 2007

August 22, 2007- Can social policies go beyond assistance and become active tools of social and economic transformation? Brazil is showing us that they can. The Bolsa Família Program, which has technical and financial support from the World Bank, is cited as one of the key factors behind the positive social outcomes achieved by Brazil in recent years.

The Program is an innovative social initiative taken by the Brazilian Government. It reaches 11 million families, more than 46 million people, a major portion of the country’s low-income population. The model emerged in Brazil more than a decade ago and has been refined since then.

Poor families with children receive an average of R$70.00 (about US$35) in direct transfers. In return, they commit to keeping their children in school and taking them for regular health checks. And so Bolsa Família has two important results: helping to reduce current poverty, and getting families to invest in their children, thus breaking the cycle of intergenerational transmission and reducing future poverty.

Although relatively modest in terms of resources when compared with other Brazilian social programs, such as Social Security, the Bolsa Família Program may be the one that is having the greatest impact on the lives of millions of low-income Brazilians.

For beneficiary Dinalva Pereira de Moura, a mother who lives in the Varjão favela in the Federal District, the program "has been a marvelous thing for me and my family. I have three children and my husband is unemployed. The Bolsa Família helps me buy food. Sometimes I can even buy fruit for the children. My children know that when we receive the money, they will have more to eat, and that makes them happier. And they don't skip school, because they know that the money depends on their going."

The virtue of the Bolsa Família is that it reaches a signification portion of Brazilian society that has never benefited from social programs. It is among the world’s best targeted programs, because it reaches those who really need it. Ninety-four percent of the funds reach the poorest 40 percent of the population. Studies prove that most of the money is used to buy food, school supplies, and clothes for the children.

Indicators like these mean that the program has made a decisive contribution to the unprecedented reduction in poverty and inequality that has occurred in recent years. Historically, Brazil has always ranked among the countries with the highest income concentration. For decades, the poorest 60 percent of the population has been getting only 4 percent of national income. With Bolsa Família and its predecessors, the income inequality measured between 1995 and 2004 fell by almost 4.6 percent. Although inequality is still very high, the Bolsa Família seems to be helping Brazil progress.

The World Bank has been involved in the design and refinement of the Bolsa Família from the outset in 2003. World Bank Program Manager Bénédicte de la Brière says: "Brazil has learned a lot from our partners in this process in Brazil. Today we are helping other countries understand and adapt their experiences with the Bolsa Família and other programs."

Success has sparked adaptations in almost 20 countries—including Chile, Mexico, and other countries around the world, such as Indonesia, South Africa, Turkey, and Morocco. More recently, New York City announced its "Opportunity NYC" conditional transfer of income program, modeled on Bolsa Família and its Mexican equivalent. This is a example of a developed country adopting and learning from the experiences in the so-called developing world.

According to Ms. de la Brière, the challenge now facing the program is to enhance the impact even further by encouraging its integration with actions in other areas such as access to labor markets, income generation, and support for youth to graduate from secondary school while at the same time strengthening state and municipal capacity in these areas.

The results of Bolsa Família show that it is possible to deal with poverty and income inequality in a sustained manner, integrating millions of people into the economic and social mainstream of the country, without giving up economic development.