Brazil's Bolsa Familia: Do Local Governments Matter?

Brazil's Bolsa Família program is a conditional cash transfer scheme that has been hailed for dramatically reducing poverty and inequality since its launch in 2003. Under the scheme, qualifying families receive a monthly stipend on the condition that they fulfill certain requirements in health and education. Although the Bolsa Família is a federal program, each of Brazil's 5, 564 municipalities play an important role in its local implementation. Using a combination of regression analysis and four case studies from the state of Minas Gerais, Brazil, this study evaluates the impact of local government capacity on beneficiaries' health and education. I find that municipalities with higher administrative capacity – more developed collaboration across sectors and more competent staff – are likely to be more effective in implementing the BFP, as observed by higher monitoring rates. As a result, the percentage of beneficiaries who comply with the program's health and education requirements is likely to be higher in these municipalities. The paper concludes that local governments are critical actors in the success of this program and calls for policymakers to build administrative capacity through a combination of incentives and regulations.