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Posted at 4:41 PM ET, 01/ 4/2011

An anti-poverty program that works

By Ezra Klein

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.

The idea in question is so simple, so obvious, that it actually takes a lot of explanation and evidence to convince people of its worth. So if you're interested, head here.

By Ezra Klein  | January 4, 2011; 4:41 PM ET
 
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Comments

energy efficiency, anticipated 7.5% economic growth this year, first female president, anti-poverty programs that are effective....

it looks like "the brazilian miracle" has arrived.

Posted by: jkaren | January 4, 2011 5:09 PM | Report abuse

Very Interesting.

Economic redistribution works.
And it has worked here. Our poor are not at all like their poor.
All we need now are jobs for them.

Posted by: grat_is | January 4, 2011 5:16 PM | Report abuse

This is America. Get over it. We only send money to the wealthy, not the poor,

Posted by: lauren2010 | January 4, 2011 5:29 PM | Report abuse

Ezra

Why no coverage of how Rick Scott is in the process of dismantling Florida's public education system?

Quit salivating over poverty programs that will never happen in the USA and instead talk about the sabotage currently being planned in Florida.

Posted by: lauren2010 | January 4, 2011 5:38 PM | Report abuse

I had a Jesuit poli-sci professor years ago who was fond of saying "The single most important cause of poverty was not having enough money." Something being obvious doesn't always mean it's actually obvious, if you know what I mean....

Posted by: davis_x_machina | January 4, 2011 5:41 PM | Report abuse

I'm not sure where all of these excitement over Brazil is coming from. If Brazillians were living in American with the same incomes, something like 95%+ would qualify for medicaid, food stamps, etc. It's a very poor country. Not poor like Africa, but roughly where America was in the late 1920s.

"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."

How is this more effective than capitalism?

If a person works full time in the U.S. for minimum wage, they earn $302.08/mo for each person in a family of four ($7.25 x 2,000 / 4).

An extremely impoverished two parent family in Brazil with two young kids in school gets $66/mo in benefits, or $16.50/mo per person. As the article suggests the basic $40 with no conditions doubles the typical poor family's income, and so we'll assume this family earns another $40/mo in the marketplace, or another $10/mo per person for $26.50/mo total for each family member.

The American family with one full time minimum wage worker has an income 11.4x that of the Brazillian family, including the anti-poverty money. While prices are lower in Brazil, they aren't much lower. The purchasing power parity adjustment is 1.277 for 2009 (GDP of $2.010T purchasing power partiy / GDP $1.574T market), meaning that $26.50 in Brazil buys the same as $33.84 worth of goods and services in the U.S. Even if a dollar went 10 time as far in Brazil (and it doesn't), the American family with one full time minimum wage worker would have a higher income.

Data for purchasing power calc here:

https://www.cia.gov/library/publications/the-world-factbook/geos/br.html

Posted by: justin84 | January 4, 2011 5:43 PM | Report abuse

Of course. The only reason that poor people are, well, poor is because they have less money than others. That's it. Don't even think about suggesting that poverty springs from (a) a lack of skills and (b) poor impulse control. Nope. It's just the lack of money. So we can eradicate poverty simply by printing enough money to give every poor person a bunch of money. Kind of like a lottery, but everyone wins (except those who don't). And, of course, that will mean that no-longer-poor people will suddenly have lots of marketable skills, a happy life, and lots of emotional discipline. Yep.

Thank goodness we have people like Ezra who can amaze us with his intellectual capacity to read blogs, talk with his friends, and go on to suggest that the answer to every problem in this world is MORE GOVERNMENT.

Oh, and thank goodness that this blog was written less than 100 years ago. Otherwise, we couldn't possibly understand it.

Posted by: VirginiaPerson | January 4, 2011 5:44 PM | Report abuse

By the way, anyone want to replace TANF, section 8, Medicaid and food stamps with the super effective $40 monthly grant and $13 monthly "keep your kids in school" bribe payment?

Poverty in Brazil is allegedly down to 7%, per the linked article.

Posted by: justin84 | January 4, 2011 5:50 PM | Report abuse

This sounds similar to Milton Friedman's idea of a guaranteed minimum income. I think Nixon even considered it in the 70's. Sadly, mainstream conservative ideas from the 70's are too socialist for today's conservatives.

Posted by: geoffcgraham | January 4, 2011 5:53 PM | Report abuse

This approach relies on 'carrots' to incentive behavior which helps keep people out of poverty.

Unfortunately, many in the US prefer relying on the 'stick.'

Posted by: tuber | January 4, 2011 5:58 PM | Report abuse

Of course if you give poor people money, they'll be able to buy more stuff, and thus they'll be less poor. Nothing groundbreaking about that. The developed world, including the US, have been doing it for decades.

What's groundbreaking is that they're actually able to pull off these transfers without 80-90% of the money being siphoned off by politically connected rich people, as is generally the case with 3rd world anti-poverty schemes.

Information technology is probably responsible for the success. Today it's easy to give poor people accounts and deposit the money directly into them, without having to pass through countless layers of corrupt officials.

Posted by: dstr | January 4, 2011 6:12 PM | Report abuse

"Don't even think about suggesting that poverty springs from (a) a lack of skills and (b) poor impulse control."


"poverty springs from poor impulse control."
my, what a novel and whimsical way to think about the cause of poverty.

Posted by: jkaren | January 4, 2011 6:21 PM | Report abuse

Of course, we have the same thing. It's called the Earned Income Tax Credit. If you're working a minimum wage job, making about $15,000/year, and you have two kids, the EITC benefit is about $5,000. That's a 33% income boost. The EITC is of course a refundable tax credit, so a household with two kids and an income of $15,000 has an effectively negative income tax rate, even accounting for payroll taxes.

Posted by: jmorton2 | January 4, 2011 6:57 PM | Report abuse

Well, duh. This approach has been suggested on roughly the same form (without the requirements for behavioral modification) by people as diverse as Milton Friedman and Teresa Funicello (author of the Tyranny of Kindness. It's worth looking up). It is based on the idea that poor people aren't morons, and they know best what to do with their own resources, without government meddling. As Funicello noted, we trust Social Security recipients and farmers with federal subsidies to do the right thing, why not poor people?

However, America is in the grip of conservative ideologues every bit as doctrinaire as Lenin. What "works" doesn't matter. Their ideology works, and if it doesn't, it's because the ideology is fine, but the people failed it.

Posted by: ciocia1 | January 4, 2011 7:26 PM | Report abuse

Brazil's program is encouraging. The only way to affect real change is to consider turning things on their head. In the United States, it seems that nothing could be more foreign to those with the most than the concept of sharing their wealth with the poor. It reminds me very much of the work of Dr. Muhammad Yunus in Bangladesh. He showed that many of those the banking establishment have deemed "unworthy" of credit are, in fact, much more likely to pay off their loans. Interestingly, he also found that communities benefited most when money was loaned to women becuase women are more likely to share with and look after their familiies.

Posted by: debrashirley | January 4, 2011 8:13 PM | Report abuse

Creative solutions like conditional cash transfers make big leaps forward for human welfare. There is a caveat though, which is that Brazil's program works extremely well in rural areas but is much less effective for dealing with urban poverty. Which goes to show a) how complex poverty is, b) how our discussions about inequality are too often blighted by outcomes (wage differentials) and not enough on considering the causes (in rural Brazil, lack of access to resources; in urban Brazil, drugs, gang warfare etc).

Posted by: sanchk | January 5, 2011 6:06 AM | Report abuse

For the US (and possibly for different areas of the US) we'd probably need different criteria.
But note the key difference between the Brazil model and US equivalents:
The means in the former are based on getting parents to actively get involved to prepare their kids to get out of poverty. The focus is on the future.
The US mentality is to focus on the past and present, make the recipients "pay" for welfeare: ie find a job (who cares if it's sustainable or can help them get out of poverty).
Thinking about the future seems beyond our grasp these days. The way most Americans look at the poor is with contempt and scrutiny, not sympathy and hope.

Posted by: RCBII | January 5, 2011 7:35 AM | Report abuse

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