Pay the 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. [...]

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.

New York Times: To Beat Back Poverty, Pay the Poor

The criticism I’ve heard of this sort of program from the hard left is that the money is essentially a small bribe to keep the poor from rising up and affecting real change. That may be true – but it’s hard to argue with with real results.

My biggest concern is the fact that the World Bank is financing all of this in the form of loans. What happens when it’s time for the countries to pay up?

I’d be interested in seeing a comparison of these conditional transfers with the U.S. welfare system.

4 Comments

  1. As a child of a woman on public assistance I have some personal insight of the welfare state. It’s far from perfect however, myself & my sister had a decent roof over our heads, medical access and enough to eat.

    I do think there should me more that just giving money to people there should be attempts at making the person on public assistance more able to live on their own, the money should be attached to education, job training, learning to adjust to a modern office environment etc. Having to finish school for high school drop outs or further their education or go to a trade school. Of course child care should be part of this with those with children.
    Another change would to let people on public assistance save money instead of whittling away their benefits.

    I could go on with this

  2. Good idea if it keeps encourages more poor Mexicans to stay home and not try to come to the U.S.

  3. Actually Lance, the poorest people don’t tend to be able emigrate. It takes money to move to another country.

  4. As a Brazilian I can say that Bolsa Familia works. As much as the usual suspects will say that “paying this people is incentive for them to keep the same situation”, mostly the it is incentive to keep them alive, mostly healthy (we have public healthcare as well as public schools), and with means to keep trying to change their situation. Which is definitely harder if you don’t know where your next meal’s coming from.

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