Thursday, January 06, 2011

Give the poor money!

Years ago a silly sounding question kept coming to my mind.  It went something like this,

"What if, instead of doing all the stuff we do, we simply raised money and handed it over to the poor to see what they could do with unfettered opportunity?" 

Of course, we never did anything like that, I suppose for a number of reasons, good and not-so-good.  Still, the notion of putting assets in the hands of the poor to craft their own destiny just feels right.  What is needed in the equation would be "benchmarks" of accountability and progress. 

Now comes, as reported by The New York Times, what appears to be a worldwide movement to accomplish just what my question hoped and implied.  Give it a read and let me know what you think

January 3, 2011, 8:15 pm

To Beat Back Poverty, Pay the Poor


The city of Rio de Janeiro is infamous for the fact that one can look out from a precarious shack on a hill in a miserable favela and see practically into the window of a luxury high-rise condominium. Parts of Brazil look like southern California. Parts of it look like Haiti. 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.

Contrast this with the United States, where from 1980 to 2005, more than four-fifths of the increase in Americans’ income went to the top 1 percent of earners. (see this great series in Slate by Timothy Noah on American inequality) Productivity among low and middle-income American workers increased, but their incomes did not. If current trends continue, the United States may soon be more unequal than Brazil.

A single social program is transforming how countries all over the world help their poor.

Several factors contribute to Brazil’s astounding feat. But a major part of Brazil’s achievement is due to a single social program that is now transforming how countries all over the world help their poor.

The program, called Bolsa Familia (Family Grant) in Brazil, goes by different names in different places. In Mexico, where it first began on a national scale and has been equally successful at reducing poverty, it is Oportunidades. The generic term for the program is 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. The payments almost always go to women, as they are the most likely to spend the money on their families. The elegant idea behind conditional cash transfers is to combat poverty today while breaking the cycle of poverty for tomorrow.

Most of our Fixes columns so far have been about successful-but-small ideas. They face a common challenge: how to make them work on a bigger scale. This one is different. 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.

In Mexico, Oportunidades today covers 5.8 million families, about 30 percent of the population. An Oportunidades family with a child in primary school and a child in middle school that meets all its responsibilities can get a total of about $123 a month in grants. Students can also get money for school supplies, and children who finish high school in a timely fashion get a one-time payment of $330.

Read this entire fascinating report here


Randy said...

Yes -- and this comes from the very top in Brazil.

Here is a portion of the inaugural address from the new President of Brazil, Dilma Rousseff, delivered Saturday, January 1, 2011. (find the full text here:

My Dear Brazilians,

My government’s most determined fight will be to eradicate extreme poverty and create opportunities for all.

We have seen significant social mobility during President Lula’s two terms. But poverty still exists to shame our country and prevent us from affirming ourselves fully as a developed people.

I will not rest while there are Brazilians who have no food on their tables, while there are desperate families on the streets, while there are poor children abandoned to their own devices. Family unity lies in food, peace and happiness. This is the dream I will pursue!

This is not the isolated task of one government, but a commitment to be embraced by all society. For this, I humbly ask for the support of public and private institutions, of all the parties, business entities and workers, the universities, our young people, the press and all those who wish others well.

It takes this kind of focus, and attention...

Lorlee said...

In a similar vain, I served on the Community Development Commission and I jokingly said, why didn't we just walk down the street and hand out checks to people and tell them to use it to fix their homes. Granted some might waste it, but I bet not many and we would get so much for bang for the buck. One employee instead of the almost dollar of administrative costs for each dollar of grants for repair. Simple ideas never seem to make it, we have to muck them up.

Chris said...

How much money would it take to give people "unfettered opportunity"? For years there has been food stamps, AId to Dependent Children, Temporary Aid to Dependent Children, Medicaid, various non-profits, food pantries, as well as individual philanthropy.

The truth of the matter is, it is not the governments money to redistribute. it's repulsive when people who earn their money are called greedy simply because they think they should keep more of it. The real greed comes from people who want to take money they haven't earned and spend it for their own benefit. Democrats, liberals, progressives, socialists-- doesn't matter what they call themselves, they are the ones who feel entitled to money that's not theirs.

Chris said...

Larry, it's difficult to have any meaningful dialogue when it takes so long to post responses.

Larry James said...

Sorry for the delay. I was out of town at a funeral yesterday.

Chris, you miss the point of the article. First, pay is indexed to performance. Second, the impact on the entire culture is enormous. The growing gap is the problem.

Adam Gonnerman said...

I was living in Brazil when Lula was re-defining the program to aid poor citizens, and was very critical of it. The Brazilian government is notorious for chronic, deep and widespread corruption, plus I figured people receiving the modest stipend would waste it.

The results have been considerably better than I could have expected.