A Knowledge Exporter

Published on BRICS Business Magazine vol 3, June 2013


For a number of years, to provide assistance that goes beyond monetary benefits and promotes social inclusion has been the mission statement of Bolsa Família, a conditional cash transfer program that supports 12 million low-income families in Brazil. Now it is successfully implementing technical cooperation initiatives with countries like the Dominican Republic, Guinea Bissau, Ghana and Kenya.

Over the last two decades, Brazil has emerged as an increasingly influential country in international affairs by placing the concept of development at the center both of its domestic and its foreign policies. While it is true that many important social and economic challenges remain, the country has been able to draw on its own recent achievements to build coalitions with other developing nations and strengthen its leadership overseas.

Technical cooperation is an important instrument of Brazil’s foreign policy, particularly for bilateral South–South relations. Different from traditional aid flows, Brazilian technical cooperation is centered in the export of development solutions and on building capacities in other developing states. The Bolsa Família (‘Family Grant’) is the flagship program of Brazil’s technical cooperation, having inspired similar initiatives in more than 14 countries. Exporting a program of such magnitude, however, requires a complex management structure, distribution and banking network which are often limited or nonexistent in many countries. But to what extent are the success factors of the Bolsa Família informing the design and implementation of Brazilian technical cooperation?

The leadership driver

The first initiatives of direct income transfers to poor families, conditional on fulfillment of specific requirements, began at the local level. In 1995, the governments of the cities of Campinas and Brasília pioneered direct cash payments to families as an incentive to ensure that their children attended school regularly. From these early experiences, a variety of conditional cash transfer or basic income programs burgeoned in various cities and states across Brazil. In 1998, at least 24 income transfer initiatives were already underway at the subnational level.

These local initiatives had an important demonstration effect and fostered the development of larger conditional cash transfer programs at the federal level. In late 2003, the federal government had at least five cash transfer programs. Each of these programs used similar income transfer tools to achieve different public policy outcomes: employment, health, education, food security, energy, and the eradication of child labor. As the fragmentation of the different programs grew, the causal link between these initiatives and poverty reduction became less clear. President Lula’s administration unified and rationalized the different cash transfer initiatives into one single program, the Bolsa Família, under the new Ministry of Social Development and Fight Against Hunger (MDS).

The economic driver

The 1990s are known as the decade of economic stabilization in Brazil, in the same way that the 2000s are called the decade of inequality reduction. After nearly two decades of uninterrupted hyperinflation, the Plano Real (‘Real Plan’) had a positive impact in stabilizing the economy and halting poverty. By 1999, inflation in Brazil had fallen to 3.12%, the lowest rate recorded since November 1949. The percentage of Brazilians living in poverty also fell from 44.2% in 1990 to 34.9% in 1999. However, in 1999, Brazil still had the highest degree of inequality in the world, with a Gini coefficient of 0.59, and the number of poor people in the country remained at a high level.

The Bolsa Família depends on robust control and monitoring systems. Benefits are paid to registered families that meet the eligibility requirements of the program, including school enrollment with a minimum attendance of 85% up to age 14, and 75% up to age 17. Another condition is that children get a full set of vaccinations in their first five years, and that mothers attend pre- and post-natal care

Economic stabilization paved the way for the future implementation of the Bolsa Família program. While economic stabilization alone would not suffice to further reduce poverty and inequality in Brazil, stabilizing and leveling were integral parts of the Brazilian strategy to fight poverty, in addition to economic growth policies.

The technology driver

The third driver of the Bolsa Família is the IT systems created to operate, control and monitor the program. At the operational level, the Cadastro Único (‘Single Registry’) enables targeting and selection, based on socioeconomic data on poor families in more than 5,000 municipalities across Brazil. Data collection and beneficiary registration are decentralized to the municipalities, while the operation and maintenance of the database are centralized at the federal level. Benefits are paid through the use of a debit card issued by a federal bank. The information in the Cadastro Único is integrated with more than 9,000 social services centers, and the benefits can be cashed in banks, post offices and lottery outlets across the country.

The Bolsa Família also depends on robust control and monitoring systems. Benefits are paid to registered families that meet the eligibility requirements of the program, including school enrollment with a minimum attendance of 85% up to age 14, and 75% up to age 17. Another condition is that children get a full set of vaccinations in their first five years, and that mothers attend pre- and post-natal care. Satellite and internet-via-radio allow data exchange with local governments in remote locations. This data is useful to ensure compliance and payment even in regions with limited access to electricity and phone lines.

The drivers embedded

Other countries from the South are keen to emulate the successes of the Bolsa Família programme. The export of the Bolsa Família program provides interesting examples of how the accumulated knowledge of the program and its drivers can inform the design of cooperation initiatives. For instance, the incorporation of a satellite and radio-based internet communication system similar to that used in the Bolsa Família will enable the implementation of cash transfer programs in remote areas of the Dominican Republic, where access to electricity and phone lines are limited. The initiative is part of a broader cooperation program between the Dominican and Brazilian governments that includes support for the rationalization of cash transfer programs through the development of an information management system that integrates data currently dispersed in three government organizations.

In Guinea Bissau, economic and institutional fragility still hinder the adoption of cash transfer programs like the Bolsa Família. Instead, Guinea Bissau and Brazil have been piloting complementary actions such as the development of a universal civil registry that in the future may lay the ground for more complex cash transfer schemes.

Another innovative way to transfer the Bolsa Família experience has been through the creation of knowledge platforms in countries that share similar development patterns and needs. Ghana and Kenya have started a common social agenda after a joint visit to Brazil in 2008. The two countries experience similar challenges in social protection, and have developed mechanisms for joint support in specific areas related to the implementation of cash transfer programs and other social policies. The same is happening between Ghana and Mozambique.

In the future, these countries are expected to have the capacity in place not only to run their own programs, but also to export their experience to other developing countries.

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Socialization à la Brazil

The colonial past left a huge social debt in Brazil. Since independence in 1822, and then the abolition of slavery in 1888, no inclusion mechanism had been put in place for indigenous people or descendants of slaves – until recently. As a republic, Brazil had a history of political patronage that characterized its social policies for most of the 20th century. In the 1930s and 1940s, the first social rights were introduced in the form of pensions, maximum working hours, and paid leave. However, these rights were restricted to a few members of urban labor groups who had the power of mobilization and could influence economic activities in a more decisive manner. From the 1960s until the turn of the millennium, the main approach to the alleviation of poverty was based on the belief that economic growth is good for the poor. But as the country grew, the concentration of income worsened.