NYTimes OpEd: How Brazil Fights Poverty

January 4, 2011

In follow-up to a (somewhat) recent post on income inequality in the United States:

There was a New York Times “Fixes” Op-Ed yesterday on how Brazil has drastically decreased income inequality over the past 7 years. Author Tina Rosenberg writes:

“Many countries display great wealth side by side with great poverty. But until recently, Brazil was the most unequal country in the world. Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent.”

How did Brazil achieve such a feat? By giving money to the poor. Or, in more technical terms: 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.”

Brazil has been a progressive force in other ways. At the School of Public Health, we often hear of Brazil’s pioneer decision to offer free HIV drugs to all their citizens: a “controversial” policy that saved lives by ignoring intellectual property rights. Hundreds of thousands of lives were likely saved. The United States put Brazil on the “Special 301” watch list.

In this case, however, Brazil was not the first-mover. In 1997, Mexico created a social program called Progresa (now renamed and better known as Opportunidades) which has demonstrated the success of conditional cash transfers.   Positive results include increased school enrollment, retention and attainment; improved nutrition and other preventative health behaviors; and reduced maternal-infant mortality rates. (I always like “public health interventions” that are really just social economic programs).

The Oportunidades program has served as a model for similar programs in other locations including Brazil and even New York City. (Spoiler alert: The NYC program didn’t work.)