Welfare done correctly: a pretty good idea.

[aurik]

The city of Rio de Janeiro is infamous for the fact that one can look out from a precarious shack on a hill in a miserable favela and see practically into the window of a luxury high-rise condominium. Parts of Brazil look like southern California. Parts of it look like Haiti. Many countries display great wealth side by side with great poverty. But until recently, Brazil was the most unequal country in the world.

Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent.

Contrast this with the United States, where from 1980 to 2005, more than four-fifths of the increase in Americans’ income went to the top 1 percent of earners. (see this great series in Slate by Timothy Noah on American inequality) Productivity among low and middle-income American workers increased, but their incomes did not. If current trends continue, the United States may soon be more unequal than Brazil.

A single social program is transforming how countries all over the world help their poor.

Several factors contribute to Brazil’s astounding feat. But a major part of Brazil’s achievement is due to a single social program that is now transforming how countries all over the world help their poor.

The program, called Bolsa Familia (Family Grant) in Brazil, goes by different names in different places. In Mexico, where it first began on a national scale and has been equally successful at reducing poverty, it is Oportunidades. The generic term for the program is conditional cash transfers. The idea is to give regular payments to poor families, in the form of cash or electronic transfers into their bank accounts, if they meet certain requirements. The requirements vary, but many countries employ those used by Mexico: families must keep their children in school and go for regular medical checkups, and mom must attend workshops on subjects like nutrition or disease prevention. The payments almost always go to women, as they are the most likely to spend the money on their families. The elegant idea behind conditional cash transfers is to combat poverty today while breaking the cycle of poverty for tomorrow.

Most of our Fixes columns so far have been about successful-but-small ideas. They face a common challenge: how to make them work on a bigger scale. This one is different. Brazil is employing a version of an idea now in use in some 40 countries around the globe, one already successful on a staggeringly enormous scale. This is likely the most important government antipoverty program the world has ever seen. It is worth looking at how it works, and why it has been able to help so many people.

In Mexico, Oportunidades today covers 5.8 million families, about 30 percent of the population. An Oportunidades family with a child in primary school and a child in middle school that meets all its responsibilities can get a total of about $123 a month in grants. Students can also get money for school supplies, and children who finish high school in a timely fashion get a one-time payment of $330.

A family living in extreme poverty in Brazil doubles its income when it gets the basic benefit.

Bolsa Familia, which has similar requirements, is even bigger. Brazil’s conditional cash transfer programs were begun before the government of President Luiz Inacio Lula da Silva, but he consolidated various programs and expanded it. It now covers about 50 million Brazilians, about a quarter of the country. It pays a monthly stipend of about $13 to poor families for each child 15 or younger who is attending school, up to three children. Families can get additional payments of $19 a month for each child of 16 or 17 still in school, up to two children. Families that live in extreme poverty get a basic benefit of about $40, with no conditions.

Do these sums seem heartbreakingly small? They are. But a family living in extreme poverty in Brazil doubles its income when it gets the basic benefit. It has long been clear that Bolsa Familia has reduced poverty in Brazil. But research has only recently revealed its role in enabling Brazil to reduce economic inequality.

The World Bank and the Inter-American Development Bank are working with individual governments to spread these programs around the globe, providing technical help and loans. Conditional cash transfer programs are now found in 14 countries in Latin America and some 26 other countries, according to the World Bank. (One of the programs was in New York City — a small, privately-financed pilot program called Opportunity NYC. A preliminary evaluation showed mixed success, but it is too soon to draw conclusions.) Each program is tailored to local conditions. Some in Latin America, for example, emphasize nutrition. One in Tanzania is experimenting with conditioning payments on an entire community’s behavior.

The program fights poverty in two ways. One is straightforward: it gives money to the poor. This works. And no, the money tends not to be stolen or diverted to the better-off. Brazil and Mexico have been very successful at including only the poor. In both countries it has reduced poverty, especially extreme poverty, and has begun to close the inequality gap.

The idea’s other purpose — to give children more education and better health — is longer term and harder to measure. But measured it is — Oportunidades is probably the most-studied social program on the planet. The program has an evaluation unit and publishes all data. There have also been hundreds of studies by independent academics. The research indicates that conditional cash transfer programs in Mexico and Brazil do keep people healthier, and keep kids in school.

In Mexico today, malnutrition, anemia and stunting have dropped, as have incidences of childhood and adult illnesses. Maternal and infant deaths have been reduced. Contraceptive use in rural areas has risen and teen pregnancy has declined. But the most dramatic effects are visible in education. Children in Oportunidades repeat fewer grades and stay in school longer. Child labor has dropped. In rural areas, the percentage of children entering middle school has risen 42 percent. High school inscription in rural areas has risen by a whopping 85 percent. The strongest effects on education are found in families where the mothers have the lowest schooling levels. Indigenous Mexicans have particularly benefited, staying in school longer.

Bolsa Familia is having a similar impact in Brazil. One recent study found that it increases school attendance and advancement — particularly in the northeast, the region of Brazil where school attendance is lowest, and particularly for older girls, who are at greatest risk of dropping out. The study also found that Bolsa has improved child weight, vaccination rates and use of pre-natal care.

When I traveled in Mexico in 2008 to report on Oportunidades, I met family after family with a distinct before and after story. Parents whose work consisted of using a machete to cut grass had children who, thanks to Oportunidades, had finished high school and were now studying accounting or nursing. Some families had older children who were malnourished as youngsters, but younger children who had always been healthy because Oportunidades had arrived in time to help them eat better. In the city of Venustiano Carranza, in Mexico’s Puebla state, I met Hortensia Alvarez Montes, a 54-year-old widow whose only income came from taking in laundry. Her education stopped in sixth grade, as did that of her first three children. But then came Oportunidades, which kept her two youngest children in school. They were both finishing high school when I visited her. One of them told me she planned to attend college.

Outside of Brazil and Mexico, conditional cash transfer programs are newer and smaller. Nevertheless, there is ample research showing that they, too, increase consumption, lower poverty, and increase school enrollment and use of health services.

If conditional cash transfer programs are to work properly, many more schools and health clinics are needed. But governments can’t always keep up with the demand — and sometimes they can only keep up by drastically reducing quality. If this is a problem for medium-income countries like Brazil and Mexico, imagine the challenge in Honduras or Tanzania.

For skeptics who believe that social programs never work in poor countries and that most of what’s spent on them gets stolen, conditional cash transfer programs offer a convincing rebuttal. Here are programs that help the people who most need help, and do so with very little waste, corruption or political interference. Even tiny, one-village programs that succeed this well are cause for celebration. To do this on the scale that Mexico and Brazil have achieved is astounding.

http://opinionator.blogs.nytimes.com...er=rss&emc=rss


I found this article to be a pretty interesting read. These programs seem to exemplify Welfare done properly: rewarding impoverished people for doing things that have a positive effect on their own well being and their future.

[quannum]

condoms work too

[Kuya]

I think it's worth mentioning that for some people, it's not an issue of whether welfare programs work or not, but some of these people are ideologically against the idea of a welfare State. They will insist up and down that welfare is bad no matter the evidence you put in front of them, ranging from arguments that the government taxing to give to the poor is inmoral, to arguments about welfare queens. It never ends.

These sort of people just don't give a fuck.

[Conrad]

Achievement Unlocked! "Feeding Your Family" $25

[archibaldcrane]

Thing is, Brazil and Mexico are used to extreme poverty - they have a tolerance for it to a point. If you're extremely poor and don't perform their dog-and-pony show, you don't get money, and that's ok for them - you just remain in that tolerable extremely poor group.

I feel that the U.S. has less tolerance for extreme poverty, and therefore is less willing to exclude extremely poor people from social programs. Are hopeless drug addicts and mentally handicapped people getting money even without meeting the benchmarks in Mexico or Brazil? Probably not. In the U.S., we are inclined to throw even more money at these groups of people because we don't tolerate destitution as well.

Haven't put a lot of thought into this theory, but it's what first struck me. If something like this was implemented in the U.S., we'd need to also learn to "toughen up" vs. those who just plain cannot get their shit together at all - whether they have control of their situation or not.

[Cadsuane]

I think it's worth mentioning that for some people, it's not an issue of whether welfare programs work or not, but some of these people are ideologically against the idea of a welfare State. They will insist up and down that welfare is bad no matter the evidence you put in front of them, ranging from arguments that the government taxing to give to the poor is inmoral, to arguments about welfare queens. It never ends.

These sort of people just don't give a fuck.

In Brazil that sort of reactionary ideology is a luxury only indulged by the fearful rich in a defeatist and cynical fashion when faced with so many preceding decades of the incorrigible Brazillian social catastrophe; which is to say, a luxury that the government hasn't exactly been able to afford, even though so many previous strategies to alleviate poverty have been unsuccessful. For example, academics in Brazil talk alot about "consciencia social" which to pessimists (conservative minded people) ends up becoming an emblematic catchphrase describing the baseless optimism and naivete of a starry eyed upper class bent on culturally uplifting this or that favela, which the entrenched civil service has long since given up on. It's different from the stateside version of astroturf pseudo-conservatism that actually manages to compel the poor to campaign against their own interests and pervert society.

[Atreides]

Thing is, Brazil and Mexico are used to extreme poverty - they have a tolerance for it to a point. If you're extremely poor and don't perform their dog-and-pony show, you don't get money, and that's ok for them - you just remain in that tolerable extremely poor group.

I feel that the U.S. has less tolerance for extreme poverty, and therefore is less willing to exclude extremely poor people from social programs. Are hopeless drug addicts and mentally handicapped people getting money even without meeting the benchmarks in Mexico or Brazil? Probably not. In the U.S., we are inclined to throw even more money at these groups of people because we don't tolerate destitution as well.

Haven't put a lot of thought into this theory, but it's what first struck me. If something like this was implemented in the U.S., we'd need to also learn to "toughen up" vs. those who just plain cannot get their shit together at all - whether they have control of their situation or not.

I don't think the US has any more or less tolerance for poverty than latin american countries, we're just more adept at ignoring it

[Acturus]

I don't think the US has any more or less tolerance for poverty than latin american countries, we're just more adept at ignoring it

One percent of us are fucking amazing at ignoring it.

/gross generalization

[vagus]

If the standard of living in North America was much lower, welfare would work. But when we live in a society where we have to drive 2 cars, live in a house & have vacations on a yearly basis welfare would not work.

[Uzor]

Welfare can work anyway. The Scandinavian countries has been welfare states for several decades, and most everyone except for the poor (which isn't exactly poor) takes a vacation at least once a year. Granted, in Sweden we don't have 1 car per person if you live in the cities - but that's mostly because you don't need it, as you can take the buss or subway anywhere you want. It is also possible to walk or take bicycle most anywhere you want as well, so most people (including me) just don't need a car. And if you do because you need to travel far and you for some reason don't feel like taking the train there, you can always hire one. Yes, we don't have the same high standard where you have to have everything possible to live, but that's fine.

Either way, I like the article in the OP. My sister's boyfriend is from Brazil, so I've heard about it before, as well as the somewhat insane situation in Brazil. He bribed his way through school because the teachers make almost nothing.

[aurik]

If the standard of living in North America was much lower, welfare would work. But when we live in a society where we have to drive 2 cars, live in a house & have vacations on a yearly basis welfare would not work.

Why is that? The implied suggestion is that we should think of turning welfare into a merit-based program, so that at least if we're paying people to not work they're not working in a way that benefits society and their children. I don't know where standard of living comes into play.

Archi makes a good point though.

[#686578]

How does the government pay for this

[aurik]

On the immediate, taxes. But the ROI (in the form of better educated populace = more productivity = more tax revenue etc) is probably high enough that in the long run it pays for itself.

[Talint]

I may not be remembering my history correctly, but didn't the right in the US used to believe that welfare should be merit based? And wasn't it the left that said that adding restrictions isn't fair?

Not that it would be that way now, but for some reason I thought that welfare-merit was a conservative idea. I could be wrong though.

[aurik]

Find some references, I'd love to read more.

[ZarakiKujata]

If the standard of living in North America was much lower, welfare would work. But when we live in a society where we have to drive 2 cars, live in a house & have vacations on a yearly basis welfare would not work.

Have you seen the standard of living in places like inner city Baltimore, Detroit, Cleveland, or the rural Ozarks? It's a shame those ppl live in their own houses, have 2 cars and go on vacations yearly making welfare completely irrelevant to them.

[SwampdonkeyPLD]

Find some references, I'd love to read more.

If you're referring to the post above yours, the stimulus bill.

[Talint]

Find some references, I'd love to read more.

I was a little skewed, but not entirely:

http://www.prospect.org/cs/articles?...m_as_i_knew_it

Written in '96, chronicling the history of welfare reform during Clinton's tenure. Of interesting note is how the right ramps up their rhetoric and the left is unwilling to play ball with Clinton's plan.

Eventually, the president signs into law "Personal Responsibility and Work Opportunity Act".

[archibaldcrane]

I don't think the US has any more or less tolerance for poverty than latin american countries, we're just more adept at ignoring it

Even with our much lower threshold of "what is poverty" - the US has about 12% of the population living below the poverty line. Compare to 18% in Mexico or 26% in Brazil and the issue in those countries is "get as many out as we can - whoever wants out the most gets out" as opposed to "there should be a safety net for everyone regardless of circumstance" in social programs.

[aurik]

Very interesting article, thanks!

Interesting how the abortive attempt at Health Care Reform back in '93 and the ensuing Republican takeover in '94 derailed those efforts to overhaul Welfare to a merit-based approach, despite the apparent bipartisan support and extremely high public support. Sounds familiar!