Boyeong Kim
Department of Latin American and Latino Studies, University of California, Santa Cruz
Conditional Cash Transfer (CCT) is a social program that directly transfers cash to qualified low-income households that satisfy health and education-related requirements. It has been widely adopted by governments in the global South since the 2000s and generally has been assessed as having improved poverty indicators. However, critical approaches have investigated how the rise of CCTs as a popular social initiative has been related to the deepening of financial capitalism. Brazil’s Bolsa Familia provides a good example. Launched in 2003, Bolsa Familia has gained worldwide recognition as an innovative and effective (at the same time, less costly and politically rewarding) CCT that has contributed to poverty reduction. Conditions that eligible families must comply with include sending children to primary school and having them vaccinated and get medical check-ups. While various positive outcomes of the program has been observed – e.g. in reducing child mortality, improving tuberculosis treatment, and increasing women’s decision power within households (Rasella et al. 2013; Oliosi et al. 2019; De Brauw, Gilligan, Hoddinott, and Roy 2014) – the financialization of social policy has resulted that debt and credit relations have replaced social security. Exploring the deeper impact of Bolsa Familia, Lavinas (2018) explicates that on one hand, the program is exclusively funded through indirect taxation, thus its redistributive effect has been limited; on the other hand, a phenomenon that the author calls the collateralization of social policy has been taking place, in which the explosive expansion of personal and consumer credit under the center-left governments is now allowing the beneficiaries of CCTs to take out more loans holding the government aid money as collateral. The continued lack of public services leads to the dependency to private loans and insurance, exacerbating insecurity and inequality.
Soederberg (2012) highlights another dimension of financialization of the social in Latin America by looking at how the strategy to promote financial inclusion of the poor in Mexico has led to the colonization of informal spaces. Since the mid-2000s, the “bottom of the pyramid (BOP)” market, or “poverty industries,” targeting the “unbanked” informal sector workers went through a remarkable growth under lax regulation that it became a common practice that leading economic groups that own banking and retail chains offer credit to the working poor with an extortionate interest rate to purchase their products. This process has been mediated by what she terms the “debtfare state” that facilitates a debt-driven accumulation strategy, in which the poor get incorporated into the financial market but excluded from capital relations.
Yet another important aspect of the financialization of social policies is its disciplinary effect. As Lavinas (2018) puts, “microcredit and CCTs act as a moral lever aimed at transforming the behavior of the poor and those at the bottom of the social ladder (508)”. The conduct-shaping effects of the financialization of social policies involve the construction of an ethical standard defined by the compliance to the power relations between creditors and debtors, in which the notion of social entitlement fades away and debt relations dictate the details of life conduct of subjects (Lazzarato 2012).
Bibliography
De Brauw, Alan, Daniel O. Gilligan, John Hoddinott, and Shalini Roy. “The Impact of Bolsa Família on Women’s Decision-making Power.” World Development 59 (2014): 487-504.
Lavinas, Lena. “The Collateralization of Social Policy under Financialized Capitalism.” Development and Change 49, no. 2 (2018): 502-517.
Lazzarato, Maurizio. The Making of the Indebted Man: An Essay on the Neoliberal Condition. Semiotext(e), 2012.
Oliosi, Janaina Gomes Nascimento, Barbara Reis-Santos, Rodrigo Leite Locatelli, Carolina Maia Martins Sales, Walter Gomes da Silva Filho, Kerollen Cristina da Silva, Mauro Niskier Sanchez, et al. “Effect of the Bolsa Familia Programme on the Outcome of Tuberculosis Treatment: A Prospective Cohort Study.” The Lancet Global Health 7, no. 2 (2019): e219-e226.
Rasella, Davide, Rosana Aquino, Carlos AT Santos, Rômulo Paes-Sousa, and Mauricio L. Barreto. “Effect of a Conditional Cash Transfer Programme on Childhood Mortality: A Nationwide Analysis of Brazilian Municipalities.” The Lancet 382, no. 9886 (2013): 57-64.
Soederberg, Susanne. “The Mexican Debtfare State: Dispossession, Micro-lending, and the Surplus Population.” Globalizations 9, no. 4 (2012): 561-575.