Brazil’s Cash Transfer Scheme Improving the Lives of the Poorest
Friday, November 19, 2010
Rumour has it that when senior civil servants at the Department for International Development (DfID) tried to interest the development secretary Andrew Mitchell in cash transfers, they couldn’t get anywhere. One morning he came across a column by my colleague Aditya Chakrabortty and was converted.
Within a short space of time the “must read” book for senior DfID officials was Just Give Money to the Poor, which charted the success of projects all over the world where aid was given straight to the poorest people – without all the consultants on fat salaries to analyse poverty reduction.
Mitchell jumped on the idea as a version of the “Big Society” applied to aid – bypass the institutional structures and empower the people directly. Interestingly, another DfID minister is believed to be less enamoured. Alan Duncan worries about that bogeyman of Conservative party nightmares: dependency. Won’t the poor just get hooked on handouts?
Probably the biggest and best known of all the cash transfer schemes in the developing world is the Bolsa Familia in Brazil. Since 2003, 12 million families have joined the scheme and receive small amounts of money (around $12 a month). Inequality has been cut by 17% in just five years, which is perhaps one of the most dramatic achievements in welfare ever recorded. The poverty rate has fallen from 42.7% to 28.8%.