Brazilian Fiscal Policy as a Global Prototype for Development

“I substituted my husband for bolsa familia,” said Maria Da Paz, a Brazilian mother of three young girls who lives in the hazardous landslide zone of Rio De Janeiro’s largest favelas, Rocinha, according to The Guardian. Analogous to Maria, 7.2 million other Brazilian women find themselves living in extreme poverty. 

It is an irrefutable fact that the measuring and cultivating of socioeconomic development and subsequent poverty reduction for emerging countries is a continuous challenge composed of numerous complex facets. When a choice is made by a state to focus on one aspect of development, another pressing issue is, in turn, frequently neglected. Nonetheless, several economically and developmentally upcoming countries have implemented policies that brought about successes and improvements to the country in question. 

In today’s polarized world, the interdependence between states and their governments about successful and failed cases is crucial to the perpetual development of other countries looking for similar improvements. 

Within the category of necessary improvements, gender inequality has gained an increasingly large role in the discussion of social and economic development. The disparity poses a continuous challenge for women pursuing professional careers — be it a different pay rate, the prevalent lack of opportunity in employment or an underlying social structure that prohibits their integration in the workforce. In an economy where not all resources are allocated properly, a welfare loss to society occurs since resources are being employed inefficiently. This model illustrates the global society’s shortsighted view on women.

While several countries with high rates of gender inequality around the world have displayed significant progress in their inclusion of women in society, most still have a substantial way to go in order to, not only empower their women, but also improve their general economic and social development. According to a United Nations analysis of their annual Gender Snapshot Report of 2022, “If change continues at its current rate, our analysis shows that gender equality will remain unrealized for centuries to come.”

This is due to the fact that while the economic impact of day-to-day tasks is indeed difficult to measure, providing an answer as to why they are usually unaccounted for, an estimate of 10-60% of GDP is composed of unpaid female labor such as “cooking, cleaning, fetching food or water, and caring for children and the elderly,” according to the IMF

When this analysis is taken to a local level, an extremely positive correlation between the proper, paid employment of women in the labor force and a country’s economic development is brought to light. 

A country that serves as an example globally for female empowerment is Brazil. In 2021, Brazil was deemed Latin America’s fourth most unequal country. Yet, amid presidential administrations, several leaders have shown continued efforts to improve the country’s conditions through the empowerment of women, among other initiatives. 

The implementation of such projects began in the early 2000s.

Specifically, in 2003 President Lula da Silva introduced the Bolsa Familia Project (BFP),”a nationwide Conditional Cash Transfer (CCT) programme managed by the relevant local administration within a federal infrastructure.” Financed by the World Bank and the Brazilian government, Bolsa Familia began as a form of monthly transfer payments sent out to families contingent on their household composition and income. A culmination of several types of previously existent but not enforced forms of governmental assistance, such as the Bolsa Escola (School Aid) Bolsa Alimentação (Food Aid), Cartão Alimentação (Food Voucher), and Auxílio-Gás (Gas Auxiliary), the program intended to “improve the efficiency and coherence of the social safety net and to scale up assistance to provide universal coverage of Brazil’s poor.” In the program’s outset, to be eligible for the payment, the family’s total monthly income per capita was required to be lower than R$218, the equivalent of approximately US$40 at the time. 

In specific efforts to empower females in the extreme poverty situations supported by the BFP, the CCT’s were given to the female head of the household at the beginning of every month. Furthermore, they were expected to be monitored for the proper spending of the transfers such as on children’s education, women’s prenatal health, and other household expenses. Not only did this condition allow for more conscious decisions to be made with the money provided, but it also encouraged the female management of assets, increasing the total female economic power in Brazilian society. 

At the time of the project’s conception, several feminists speculated that the direct transfer of the money to female figures would induce more of a burden on women. The sustained argument was that male companions would feel threatened by the growing female empowerment, placing women in a vulnerable position rather than a superior one. 

Yet, the strategy was meticulously calculated — “Our research shows that the money empowers women. In many cases, it’s their only source of income, so it means they are less dependent on their husbands, more likely to share in decision-making, and have higher self-esteem,” recounts Tereza Campello, Brazil’s former social development manager. Accordingly, as of 2010, 54% of the Bolsa Familia recipients were women, and in 2013, 93% of family households across the country were considered to be headed by women. 

Years later, the Bolsa Familia remains internationally renowned for its success in lowering poverty, increasing education and decreasing the gender inequality gap in the country. In 2013, the project was already accountable for “up to 25% of Brazil’s reduction in inequality and 16% of the drop in extreme poverty,” according to a case study conducted by the Women Deliver Organization. Furthermore, statistics drawn directly from the World Bank point out that Brazil’s population under extreme poverty percentage declined from 9.7% to 4.3% over the 10-year period. The change in the extreme poverty percentage by nearly two-fold may be traced back to the wide range of benefits brought by the Bolsa Familia such as healthcare, education and general improved support of critical living standard conditions such as electricity and sanitation. Yet, a significant element in that improvement is the passage it opened for women to push themselves, and their children, out of that reality — a positive externality to Brazilian society as a whole. 

As a leader of the Global South, Brazil set high fiscal policy standards for fellow developing countries that need an immediate remedy in order to improve poverty, social inequality and gender inequality, all of which’s improvements perpetuate fundamental economic growth. 

Bolsa Familia has served as a model for the implementation of similar CCT programs in over 40 countries, bringing recognizable advancements to countries such as Chile, Turkey, Indonesia, Morocco, South Africa, Mexico and others. Moreover, in virtue of its admirable progress officially recognized since 2010, Brazil became a host to frequent visits from over 120 delegations across the globe who traveled to learn about the project. 

 Nevertheless, the substantial improvements accomplished through the BF remain minor when it comes to gender equality and overall poverty reduction in the country. As Maria Da Paz says, “the changes in the moral and cultural order are slow,” despite life still being “better than it was five years ago.”

As brought to light in a recent study conducted by UNICEF, approximately 32 million Brazilian children live in poverty, a number representing 63% of the country’s youth. If that is not enough, the Brazilian government has announced that in the first semester of 2022 alone it has received and attended to more than 31 thousand reports involving domestic violence against women.

While the success story of Bolsa Familia allows for optimistic approaches to socioeconomic development for countries attempting to improve their current situation, Brazil itself serves as an example that despite this huge success there is still a long path ahead in order to reach even greater improvements in the same goals targeted by the program. Hence, the BFP must serve as a reminder to other developing countries searching for improvement as a potentially implementable model, yet must be frequently amended in order to achieve full efficiency in its objectives realistically and in a timely, stable manner.