Wednesday, January 5, 2011

End World Poverty?

Mexico's Oportunidades and Brazil's Bolsa Familia are two anti-poverty programs that are making a big difference - and are being copied world wide. Both of these programs focus on incentives. In exchange for small monthly payments, families are required to make sure their children are immunized and go to school.

The tiny monthly payments help alleviate poverty today, but perhaps more importantly, the extra education helps alleviate poverty and fuel growth in the future. The small payments replace what the children would have earned if they had dropped out of school to help support the family. 

In Brazil, this program has dramatically reduced poverty and inequality. Despite the program's relatively low cost and surprisingly efficient administration, not all Brazilian's support the program.  Wealthier Brazilian's object to the use of government funds to redistribute income. The key element of this program that makes it more than just redistribution - is that it aligns the incentives of poor families with the long run growth of the country - which depends on an educated labor force.

Newscast video about Bolsa Familia

NY Times article about these programs

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