Luis Henrique Paiva, Associate Researcher at the IPC-IG, Researcher at Ipea and, former National Secretary of the Bolsa Familia Programme (2012-2015), gave a presentation on "The Bolsa Família Programme" at the Delhi Economics Conclave, 2015, in New Delhi, India on 6 November. Mr Paiva spoke at Plenary Session 1 about the Brazilian experience with conditional cash transfers. Organised by the Ministry of Finance of the Government of India, this year's theme for the conference was "Realising India's JAM Vision". It was policy-oriented and covered topical economic issues affecting India as well as the world at large.

1. The Bolsa Familia
Programme
Luis Henrique Paiva
Delhi Economics Conclave 2015
New Delhi, 6th of November

2. Summary
• From (2003-2005)
• To (2013-2015)

3. Summary
• From (2003-2005)
• Four different CCTs at the National level, based on different
elegibility criteria, datasets and administrative structures.
• Large gaps of coverage and overlappings.
• Single Registry with inconsistencies; no conditionality monitoring
• To (2013-2015)

4. The emergence and consolidation of CCTs
• Brazil (as many other LA countries) had a long experience delivering SP through social
insurance. But until the mid-1990s, the working poor and their families had very
limited access to SP. Children were disproportinately affected by poverty.
• Mid-1990s: local CCT programmes in Brazil; 1997: Mexico’s Progresa.
• 2001-2003: four different CCTs at the national level, based on different eligibility
criteria, datasets and administrative structures. Large gaps of coverage and
overlappings.
• 2003, Oct: Bolsa Familia unified previous CCTs. Same rules, one administrative registry
(the Single Registry for social programmes), one administrative structure (Ministry of
Social Development). Payment based on the extensive network of a public bank (Caixa)
(which includes branches, lottery outlets and retail agents in 99 percent of BR
municipalities). Coverage improved rapidly from ~5 million to 11 million families.
• New element of SP: harsh criticism from part of the press and from the upper middle
class. Administrative problems: Single Registry with inconsistencies; no conditionality
monitoring.

5. The emergence and consolidation of CCTs
• 2005-7: better coordination with local administrations, responsible for registering low
income families in the Single Registry. This new arrangement included performance-
based financial incentives. Dramatic improvement in data quality. Conditionalities
began to be monitored by the Ministries of Education and of Health. Studies started
to reveal good targeting; impacts on the reduction of poverty and inequality; and
initial impacts on education (attendance).
• 2010s: emergence of good evidence of impacts on education (attendance,
progression and learning) and on health (child mortality, vaccination among others).
No negative impacts on reducing labour supply or on increasing fertility.
Complementarity with the contributory system. Low cost.
• Administration: new version of the Single Registry was adopted in 2011 (on-line IT
system operated by all municipalities; new form); new top up benefit (minimum
income guarantee for beneficiaries) (2012-13); softer version of conditionalities
(2013).

6. The Bolsa Familia Programme today
• Typical Conditional Cash Transfer:
• Targeted: almost 80 percent of beneficiaries among the 40 percent poorest. Targeting
mechanism based on self-reported income, municipal “quotas” and cross-checks with
other administrative records.
• Conditioned: school attendance, vaccination and frequent visits to health clinics by
children and pregnant women.
• Modest: benefit level up to R$ 77/per capita/month (~ $ 42 PPP 2013); average level of
R$ 47/per capita/month (~ $ 25 PPP 2013).
• Paid to the mother, whenever possible.
• It reaches 14 million families (~50 million people – ¼ of the Brazilian population).
School attendance of 15 million children monitored every month. Health
conditionalities of 8 million families monitored twice a year.
• Strong coordination among Federal, State and local Governments: R$ 500 million
(~$270 million PPP 2013) in transfers from the Federal to local levels). Strong
coordination among Ministries of Social Development, of Education and of Health.

7. Reaching a public not covered by contributory
social security

8. Impacts on the extreme poverty rate

9. Social protection expenditures
in R$ billion % of GDP
Soc. Security benefits - civil servants (A) 209,5 4,3%
Soc. Security benefits - private sector (B) 357,0 7,4%
Unemployment Insurance (C) 31,3 0,6%
Abono (D) 13,5 0,3%
Social Assistance Benefits (E) 31,8 0,7%
Bolsa Familia (F) 24,0 0,5%
Total (A+B+C+D+E+F) 667,1 13,8%
Social Security benefits (A+B) 566,5 11,7%
Passive employment policies (C+D) 44,8 0,9%
Social Security and Employment policies (A+B+C+D) 611,3 12,6%
Social Assistance (E+F) 55,8 1,2%
PIB 4.844,8
Social Protection Expenditures as a percentage of GDP - Brazil 2013

10. Remaining issues
• General
• Bolsa Familia is very progressive and efficient, but relatively small. Expenditures
with contributory SP are massive and not necessarily progressive. It is important
to look at the broad picture of Government expenditures (benefits, services,
subsidies) and try to make them more pro-poor.
• Specific
• Exclusion error of cash transfers should be a permanent source of concern. If the
objective is to eradicate extreme poverty, fighting exclusion error is even more
important than trying to reduce inclusion error.
• Brazil has several benefits addressed to children (tax credits for the upper middle
class; a family benefit for formal workers; Bolsa Familia for the poor). Unifying
them under the same criteria may be a feasible mid-term project.
• Investments in IT should be a permanent source of concern. They reduce public
and private operational costs associated with CCTs, a critical aspect of targeted
transfers.

11. Luis Henrique Paiva
Researcher at the Institute for Applied Economics Research.
Former National Secretary of the Bolsa Familia Programme (2012-15).
luis.paiva@ipea.gov.br
+55 61 2015 5029