Conditional Cash Transfers and Rural Development Policies in Brazil: Exploring Potential Synergies between Bolsa Família and Pronaf

F. Garcia, S. M. Helfand, and A. P. Souza

ABSTRACT

 This paper examines possible synergies between conditional cash transfer programs (CCTs) and rural development policies in Brazil. Policy synergies could exist for a variety of reasons. In environments where there are market failures for credit and insurance, CCTs could provide liquidity and reduce vulnerability to shocks, thereby contributing to the success of rural development interventions. CCTs might improve the nutrition and health of households, allowing them to work more productively and increase the independence and bargaining power of women, permitting them to participate more fully in community-based development projects. Synergies could also run in the opposite direction. Rural development policies that succeed in raising income could enhance the impacts of CCTs on the health and education of children. To the extent that synergies exist, government officials might seek to coordinate the design and delivery of these policies in order to take advantage of complementarities and increase program impacts. In this paper, we test for the existence of policy synergies and estimate their magnitude in rural Brazil.